Why Should You Add Riders To Your Term Insurance Policy?

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  | Published: 26 November 2019 | Last Updated On: 08 February 2021

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A term insurance policy is a must for those individuals who have dependents such as parents, spouse, children, and some other liabilities such as a mortgage, home loan, EMIs, etc. However, you should also customize your term plan as per your lifestyle, and the most ideal way of doing to the same is by buying term insurance riders or additional coverage with your basic term insurance policy. You can purchase the rider to boost your life coverage plan by paying an extra premium.

A pure term plan is purchased to provide financial protection to your dependents so that in an event of the untimely demise of the insured, the beneficiary(s) don’t have to bear the financial burden. The sum assured offered by the insured is generally a bigger amount and it is likely to sufficient to take care of the expenditures of the surviving members if something happens to the sole breadwinner of the family. However, when a policy buyer purchases extra coverage that is known as riders along with the basic term plan, the added term insurance riders make the overall deal for beneficial for an individual.

While different insurers offer different term plan riders, some of the most common riders that are available in the UAE are as follows:

Waiver of Premium Rider

Most of the insurance companies offer waiver of premium rider for the policyholder. Basically, this rider assures that the remaining premium will be waived off if the insured is unable to pay off the annual premium due to some disability or income loss.

Generally, the policy lapses and you get no death benefit if you discontinue paying premiums. But thankfully, this rider ensures that if you are suffering from any sort of disability during the term of your premium, the insurance policy remains active and also the future premium will also be waived off.

Accidental Death Benefit Rider

Life is uncertain and it is full of unexpected events. One can never predict what will be happening at the next moment. One could pass away peacefully in his sleep or due to an accident.

In such cases, buying a basic term insurance plan will offer a normal death benefit i.e. guaranteed sum assured that might not be sufficient for the surviving members of the family.  Plus, in today’s fast-paced world, the number of accidents has also significantly increased. Thus, it becomes quite important to give an additional layer of protection to your loved ones’ future. That is where accidental death benefit rider comes in. With this rider, your dependents will get an additional sum assured if in case you pass away due to an accident.  

Income Benefit Rider

The income benefit rider should be included by those policy buyers who are the sole breadwinner of their family. Reason being, it ensures financial protection to the loved ones in an event of the sudden demise of the insured. This rider assured that your loved ones get an additional sum assured for another 5 to 10 years along with the sum assured. The family members will be offered the funds managed by the insurer and a smooth transition will also be ensured. Hence, the sudden loss of income because of the disability of the insured will not certainly impact the finances of the family.

Critical Illness Rider

Some of the major illnesses such as cancer, heart attack, coronary artery bypass, kidney failure, paralysis not only affect the person physically but also affect economically. Since the hefty expenses associated with the treatment of these critical illnesses might not be affordable for all people. For such people, critical illness rider is the feasible option. This rider can compensate you with a lump sum amount if you are treated with medical illnesses that were already specified in the term insurance policy.

Permanent & Partial Disability Rider

There may be times where the policyholder may suffer from a permanent or partial disability due to an accident. In the event of an unforeseen accident, he/she may lose an arm or a leg. Due to this, one will not be able to work. This will cause a significant toll on the financial security of the whole family. Well, this rider comes to your rescue during such circumstances. It offers financial protection to the insured’s family in case the policyholder suffers from a partial or permanent disability.

The full percent of the sum assured is offered to the dependents in an event of permanent disability while a portion of the total sum assured is offered in case of partial disability. However, the rules and regulations associated with the permanent and partial disability rider differ from one insurance company to another. Thus, it is imperative to go through the documents carefully while buying a term insurance policy.

Accelerated Death Benefit Rider

Medical expenses that are associated with the diagnosis of a terminal illness can increase the financial burden of your family. So, if you have added the accelerated death benefit rider to your term insurance policy, you will get a portion of the sum assured when you’re critically ill. Well, this amount can be used for paying your medical bills. And the remaining portion of the sum assured is paid to your dependents once you’re gone. This is a very low cost rider that is very beneficial during the final days of the patient.

Conclusion

Why compromise with your family member’s life when you can easily avail of term insurance riders by just paying a little extra? Just opt for the riders along with your basic term insurance plan as per your needs to ensure the financial stability and security to your loved ones when you are no longer in the world. This will surely help your loved ones live peacefully in your absence.