How to customize your term insurance with riders

But it’s important to stay aware and informed before making a decision as important as this. Though term insurance is the simplest and purest form of insurance, there are ways to further enhance its protection. Let’s understand more about term insurance and how to customize your policy with riders for better coverage.

Term Insurance and Riders

A term insurance policy is an ideal plan to keep in your financial portfolio as it comes packed with its set of advantages. The most vital being it is the purest and the most affordable form of life insurance that provides monetary security for a specific period to the policyholder’s family in case of their death. In addition, it assures a pre-decided payout to the nominee, which is non-taxable. Moreover, the premium is among the lowest if purchased early, though it may vary with age and medical condition.

Every insurance plan gives an option of the riders or extra coverages, which can be added to the traditional policy, thereby strengthening the protection against additional risks. However, these need to be selected carefully by the insured as the customization comes with an extra cost, which thereby increases the premium. So, here are a few riders that should certainly be added to the term insurance to enhance the coverage of your insurance plan:

Accidental death benefit rider

The accidental death benefit rider comes to play if the policyholder dies due to the misfortunate event of an accident during the term period. In this case, the additional sum assured is paid to the beneficiary, which is computed on the original sum assured of the term plan. This rider is only applicable if the insured passes away in an accident; in any other circumstance, the sum assured received by the beneficiary is according to the term plan.

Critical illness rider

This rider secures the insured by providing a lump-sum amount post-diagnosis of specified critical illnesses such as cancer, heart attack, kidney ailment, paralysis, etc. If not added to the insurance, this would otherwise require individuals to spend exorbitant amounts on medical treatment without any financial protection. Critical Illness Rider alleviates the policyholder of any financial strain and acts as an extra source of income which the family needs at this hour. It makes treatment costs affordable, treatment in a better hospital possible, pays off regular bills and EMIs even if you need to take leave without pay. Don’t forget to read the documents carefully and be aware of the illnesses covered as part of the cover.

Accidental disability benefit

Similar to the accidental death benefit rider, this rider shields the policyholder in case of disability occurring out of an accident. This rider is a beneficial cover to add to the traditional term policy as it secures the insured if met with an accident that causes partial or permanent disability. With this inclusion, the policyholder is entitled to additional sum insured in case of this unfortunate instance. This rider is often combined with accidental death rider and can also be treated as a source of income. For instance, if you opt for a rider with a cover of Rs 25 lakh then the Insurer will pay you this cover amount in case you end up with disability due to an accident.

Waiver of premium rider

This supplementary cover is highly recommended for those who work in accidental prone jobs such as construction, manufacturing, etc. With this add-on, the insured can be waved off from paying future premiums in conditions such as disability or loss of income. Having this add-on also ensures premium payments until the expiry of the policy. However, in the absence of this waiver of premium rider, if a similar situation arises, then the policy stands expired.

Child support benefit rider

The child support benefit rider is another essential cover as it pays the kids an additional sum assured upon the death of their parents who opt for this rider as a part of the term policy. This guarantees that the child’s needs are taken care of, and they can also pursue their education and dreams without financial concern.

The author is Head – Term Life Insurance at Policybazaar.com. The views expressed are that of the author.