A term insurance policy is a plan that helps you ensure the financial safety of your family after your demise. It covers the well-being of your family and financially compensates them in any of the emergencies they face after your death.
If this term insurance policy serves such a personal purpose, making it unique for yourself becomes essential. You can choose your policy coverage by aligning it with your capacity to spend on the policy premium with the help of a term insurance calculator.
Just like that, you can align the specific needs and conditions with the options of riders available in front of you. This will customise the policy for you and help you make informed decisions.
Let us understand what term insurance riders are!
Term Insurance Riders
Like any other traditional form of insurance policy, term insurance also blesses the policy seekers with various options of add-ons.
These add-ons or riders are the services and additions in coverage that the insurance company offers in order to improve your policy and its effectiveness.
Riders are optional services offered by the insurance company for an increased premium. It provides different benefits and unique covers in case of specific situations or conditions. These riders can help you customise your plan according to your future, life, and finances.
Types of Popular Term Insurance Riders
- Critical Illness Rider
The insurance company usually provides a list of critical illnesses that are considered fatal. These lists typically include illnesses like cancer, heart attack, organ failure, tumours, strokes, etc.
The critical illness insurance allows the policyholder to raise a claim in case they are diagnosed with any of these illnesses. The insurance company will pay out a lump-sum amount that is mentioned in the policy or by the policyholder. This amount will be compensated to the policyholder, or it will be settled with the hospital through cashless treatment and hospitalisation.
- Accidental Death Benefit Rider
In case of an accidental death, the insurance company will pay the coverage amount to the policyholder’s family.
The company will extend the financial help, sometimes even a little extra financial support, needed by the family in those difficult times. So, if you opt for the accidental death benefit rider, your family will be safeguarded in case of your accidental death.
- Accidental Disability Benefit Rider
If the policyholder goes through an accident, it is highly possible that they will lose mobility capacity. This means that the accident caused a disability to the policyholder. In most cases, people lose their jobs, and they lose any source of income.
The accidental disability benefit rider protects the family by providing financial support to replace the lost income of the policyholder.
- Waiver of Premium Rider
There is a possibility that such a situation can arise in your life when you are unable to pay the policy premium. It can be due to any reason, but it is a potential situation that you might have to face.
In this case, you will have to stop paying for premiums as it is not an immediate need or necessity in life. The waiver of premium rider allows you to do so without a policy lapse.
The policy will be intact in that difficult time. It reduces the financial strain on you and allows you to pay whenever you can. (There are conditions and waiting periods attached to this rider.)
- Child Support Benefit Rider
If the policyholder is a parent and they die a sudden death, the child will become really helpless. The insurance company can at least provide financial support in such a case. This rider offers child support benefits to the policyholder’s child in case of their death.
Understanding the importance of riders will begin with the knowledge of their benefits. Term policy riders are extremely beneficial to the policyholders, and the aforementioned services prove that.
Although these riders increase the cost of your policy, i.e., the policy premium, they provide worthy benefits in return. Hence, you should customise your policy with these riders.