Term insurance is a simple form of life insurance which can be availed with riders. What are riders in term insurance? Riders are extra benefits for a slightly higher premium.
Riders enhance your term insurance cover. When you are paying an extra amount, it is imperative to analyze and understand the importance of term insurance riders.
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Family income rider offers income to the beneficial nominee, with an amount equal to policyholder’s monthly income, on death of the policyholder within the term. Salaried individuals with many dependents may choose this rider to create a source of income in addition to the basic sum assured under term insurance. The rider is extremely useful if you have long-term and short-term financial obligations of loved ones to take care of.
Opt for this rider if you are a frequent traveler as it gives your dependents an additional sum assured if policyholder dies in an accident. If the basic sum assured is Rs 25 Lakhs and the policyholder has bought an accidental death benefit rider of Rs 5 Lakh, the overall claim amount is Rs 30 Lakh, if death occurs due to an accident.
The original sum assured is taken into account to determine the percentage of the additional sum assured. The rider provides a considerable cover at a reasonable premium. The premium for the rider is expected to remain unchanged across the policy tenure.
What if you suffer from a critical illness like cancer or a heart attack? The critical illness benefit rider covers all medical expenses of a critical illness. Many people choose this rider due to its numerous benefits.
The premium amount does not change. Moreover, insurers waive off future premiums when the policyholder is diagnosed with a critical illness. You get tax deduction up to Rs 1.5 Lakhs a year under Section 80C for premiums paid towards critical illness benefit rider. The rider offers you a large cover that can cover both medical and day-to-day expenses.
Accidents may not always result in death. There are chances that an accident may result in a temporary or a permanent disability. Accident disability benefit rider gives you additional benefits, on death or because of temporary or permanent disability in an accident.
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Many term insurance policies with this rider pay you a certain percentage of the sum assured for the next 5-10 years on disability in accidents. Different insurers have different terms and conditions.
If you choose this rider called waiver of premium, the future premiums shall be waived off under certain circumstances. Let’s assume a situation where you become permanently disabled in a road accident. How will you pay the premiums? Go for this rider which comes with an extra premium. Even though you do not pay the premium, the insurance company does not cancel the policy. Not all term insurance plans offer this rider. Check for the availability if you really require this rider.
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