Term Insurance policies offer financial security to the family of the insured, in case of the insured’s early death before the policy matures. Apart from providing higher coverage at lower premium rates, it offers additional privileges in the form of term insurance riders.
A term insurance rider is an additional benefit which is completely optional and can be attached to a term insurance policy at a nominal rate, at any time. These are attached to the primary policy and offers additional benefits over and above the pre-decided sum assured as an additional financial cover. These act as the customizing features in any term insurance plan or policy and can be added or removed according to one’s needs and requirements.
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A term insurance rider or simply referred to as a rider is a provision to an insurance policy that changes the terms or adds several benefits to an insurance plan. Riders provide the insured with options like additional financial coverage, or these may even limit or restrict coverage on a basic sum assured amount.
There are additional costs added to the premium amount to buy a rider. Many of these are low in costs. It is also known as an insurance endorsement and can be added to plans that cover homes, life, rental units, and autos.
Here are some of the very important term insurance riders made available in most term insurance plans and policies:
During the term of a policy, if the insured passes away because of an accident then this rider pays an additional sum added to the basic sum assured on the insurance policy to the beneficiaries. This additional sum is the percentage amount calculated on the policy’s sum assured. This amount will vary from insurance company to company with a fixed premium throughout the term of the policy. People who work in life-risking positions or frequently travel on work basis can add this rider.
An individual may contract a terminal illness suddenly which may overburden his or her family with regular medication and treatment expenses. Under this benefit rider, the policyholder or his family can receive the sum assured before the policy maturity term. This will help meet the necessary treatment expenses and makes it an extremely beneficial rider at a low cost.
This rider is often clubbed with the accidental death benefit. This rider comes into function only if the disability is caused by an accident affecting partial or permanent disability to the insured person. The policyholders are paid in smaller amounts over 5 to 10 years of the total sum assured under this policy. It acts as a source of income in such difficult times but the payments assured are based on the terms and conditions laid down in the original policy.
ome of the policies under the Aviva Term Plan provide riders such as the Critical Illness Rider or additional benefits like the Terminal Illness Benefit. The Riders can be purchased and added separately in place of an extra premium. Also, other benefits for Terminal Illness have various protect variations, such as the In-built Terminal Illness Benefit
Under this benefit rider, most of the major ailments and treatments are covered. A policyholder may receive a lump sum amount on the discovery of a critical illness recognized under the policy. The amount given to policyholders may decrease or increase in comparison to the sum assured. One must read all terms and conditions mentioned in the policy before purchasing it.
If a policyholder is unable to pay future premiums due to loss of income, unforeseen events or accidents causing permanent disability, this benefit rider is a cover for all premium payments until the policy expires. It enables the policy to survive even if premiums cannot be paid. Otherwise, in the absence of this rider benefit, failed premium payments disables any policy benefit when the policy expires, especially the death benefit provision.
This benefit acts as a source of income for the deceased policy holder’s beneficiary/ies. This rider is exclusive to certain policies. This rider benefit enables the policyholder’s family to receive a certain amount of income per annum for the next five or ten years along with the sum assured.
These are the best of 6 beneficial riders that can be added to most insurance plans and policies:
Adding benefit riders to policies is a way of securing the future. Thus consider a few points in adding suitable riders to policies.
Step 1: Before purchasing a policy, check what rider benefits are available with your choice of policy
Step 2: Adding riders to policy also leads to an increase in the premium amount, add these to the basic amount assured in the policy to decide based on the cover amount you seek
Step 3: Ensure that the benefit rider is taken into effect as soon as the policy has been initiated so that the benefits can be utilized before the policy matures
Step 4: Pay for the additional benefit to apply and modify the policy
Here are the key features and core benefits of a rider:
Here is a rundown to comparison to other term insurance benefits:
These are flexible and beneficial to not just the policyholders but also for their beneficiaries
You must take the following things into consideration while adding a rider:
Kindly read all offer documents, terms and conditions mentioned carefully before applying any rider to any policy, and before purchasing any policy.
A1. Yes, maximum major ailments and diseases are covered under this benefit rider. However, best practice is to read all the diseases, sickness written down on policy documents.
A2. Any term insurance rider increases the amount of risk covered in a policy.
A3. No, the benefits can only be availed by those under 65 years of age.
A4. No, it is an optional policy. One has to check what the riders available with a selected policy are; there are plans and policies without any rider option available.
A5. Yes, Riders can be added to any term plan- money back plan, endowment plan, or unit-linked insurance plan, even life insurance policy can be modified with benefit riders.
A6. Certain policies allow riders to be added after a few initial months, some can be added annually, some at the start of the premium.
A7. Yes, the policyholder along with their beneficiaries can all use the benefits provided by riders.
A8. The premium amount on the original policy sum assured remains the same irrespective of any rider benefit. However, if an additional rider is added to the policy then the premium will also increase by a small amount as an additional premium charge for added benefits.