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Term Insurance Riders

Term Insurance Riders are endorsements that offer extra coverage to a policyholder. This coverage is an addition to the default death benefit provided by a term plan. In some Term Insurance policies, rider benefits are available at no additional cost, while rider benefits must be purchased separately in the others.

Riders can be purchased when buying a new Term Insurance Policy or at the time of policy renewal. 

You may like to Read About: Saral Jeevan Bima Term Plan

Benefits of Term Insurance Riders

Term insurance riders have a whole set of benefits. They are as follows:

  • The Benefit of Customized Coverage

    Term Insurance Riders offer the benefit of purchasing additional coverage as per the policyholder's need for risk that might not be covered under a Term Plan.

  • Budget-Friendly

    Purchasing an additional Term Insurance rider is more economical and budget-friendly than buying a whole new life Insurance Policy. With riders, a policyholder can purchase the additional rider benefit at a lower rate as compared to a term plan premium.

  • No Requirement of Buying an Additional Term Plan

    Since most term insurance plans do not offer coverage against all risks through a single term plan, it is beneficial to purchase additional risk coverage through Term Insurance Riders.

Important Term Insurance Riders

There are different types of term insurance riders offered by different insurance providers. The important term insurance riders are briefly described below:

  • Accidental Death Rider

    Accidental Death rider provides an additional amount as the sum insured and the death benefit of a term Plan. Death due to accidents on the road, factories, or construction sites is covered under Accidental Death Rider benefit.

    Many times, the amount received as a death benefit under the Term Insurance Plan may not be sufficient. In such cases, an additional benefit through the accidental death Term Insurance Rider proves helpful. The rider can be purchased with a Term Insurance plan at budget-friendly rates.

    People working in hazardous conditions or involving frequent travel, benefit from this rider.

    It must be noted that some insurers do not offer the accidental death rider in their online term plans.

  • Critical Illness Rider

    Critical Illness includes diseases such as cancer, heart attack, paralysis, coronary artery bypass, and kidney failure, among others. These life-threatening diseases take a toll on a person's physical and mental health, coupled with the high expense required to treat these diseases. The lack of funds, in many cases, leads to the person being unable to avail of the necessary treatment.

    A critical illness term insurance rider works like a saviour by offering a lump-sum amount to the policyholder on being detected by a critical illness.

    It is essential to read the policy’s features and benefits to know if the policy would continue or terminate once the lump-sum payment is made for the critical illness diagnosed. Therefore, it is recommended to read all policy documents carefully and know its terms and conditions when buying a critical illness rider. It is advisable to select a plan that offers maximum coverage for the maximum number of illnesses.

    In case of the death of a policyholder is due to a critical illness during a policy period, the benefits of the term plan are paid to the beneficiary.

  • Income Benefit Rider

    This Term Insurance Rider is highly beneficial for people with salary as their only source of income and a single earning member. In such a scenario, if the earning member faces death, the Income Benefit rider provides financial protection to the family of the life insured. The family gets an additional amount for 5-10 years, in addition to the sum assured benefit of the Term Plan. The income source for the next 5-10 years offers a steady flow of funds that aid in meeting their financial needs.

  • Accelerated Death Benefit Rider

    The Accelerated Death Benefit Rider is highly beneficial in the case of the life insured getting diagnosed with a critical illness. The rider provides financial help to bear mounting medical bills. Under the accelerated death benefit rider, a part of the sum assured is paid to the family in the beginning. The amount helps in meeting the expense incurred on the treatment of the critical illness. The remaining amount of the sum assured is paid after the death of the life insured.

    The rider is available at easy and budget-friendly premium rates that offer financial aid in tough times. The payment made in the beginning helps during the treatment of the patient, and the remaining payment helps provide financial support to the family after the death of the life insured.

  • Waiver of Premium Rider

    The Waiver of Premium Riders is especially useful as it ensures waiving off of the premium payments if the policyholder is unable to make the payments due to loss of income source or some unforeseen disability.

    In most life insurance policies, the policy gets lapsed if the premium payments are not made in the grace period. In such a case, the policy benefits are also immensely reduced. However, with the Waiver of Premium Rider, the policy continues to be active if the life insured suffers from some disability, and all subsequent premiums are waived off.

    This rider is especially suited for people working in mining or chemical factories where the accident risk is high.

  • Permanent and Partial Disability Rider

    The unfortunate loss of a leg, arm, or eyesight may lead to a person's partial and permanent disability. In such a case, the person may lose his ability to work, suffer an immense financial loss, and the family may lose its financial security.  The Permanent and Partial Disability Rider comes to rescue in this situation by offering financial coverage to the family members.

    The following points must be noted in the case of a Permanent and Partial Disability Rider:

    • The complete sum assured is paid on the total disability of the life insured
    • In the case of partial disability, the amount paid is a portion of the sum assured
    • The rules of the rider vary for different insurers
    • Therefore, it is vital to read the policy document carefully before purchasing this term insurance rider
    • The rider is usually bought with Accidental Death Rider and is effective only if the policyholder is getting a disability during the policy term.

What is Not Covered in a Term Insurance Plan or the Riders?

Death of the life insured due to any of the following reasons is not covered by a Term Insurance plan or a rider.

  • In case of death due to suicide after one year of the policy term, the policy benefits are nullified, and policy is terminated. If the death occurs before completion of one year of the policy term, the beneficiary has eligibility to receive 80% of the premium amount

  • Death due to self-harm

  • Death caused due to HIV AIDS or any sexually transmitted disease

  • Death due to alcohol or drug abuse



  • Q: What are Term Insurance Riders?

    Ans: Riders are an amendment or endorsement to an existing Term Insurance Policy that offers additional coverage to the policyholder.
  • Q: Are riders available free of Cost?

    Ans: Riders can be purchased along with a term insurance policy at budget-friendly rates. Some insurers offer riders as an inbuilt feature of the policy.
  • Q: What are the main features of Term Insurance Riders?

    Ans: Here are some of the main features of a Term Insurance Rider:
    • Term Insurance Riders can be taken at the time of purchasing a life insurance policy
    • They can be purchased at reasonable premium rates that are less than the policy premium
    • The sum assured offered by a Term Insurance Rider is less than the basic death benefit of a term plan
    • Riders prove beneficial if any unforeseen incident happens that may affect the financial stability of the policyholder
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