Should You Choose A Rider When Buying A Term Plan?

Buying a term insurance plan is the smartest way to provide financial cover to your dependents in the unfortunate event of your demise. While you need to choose the coverage amount and the tenure, term insurance plans also come with additional riders which you can buy by paying an extra premium.

“Riders are optional extra benefits included in a life insurance policy that can provide additional financial security to the policyholder at a nominal additional cost. They are attached to the base/primary policy,” says Richit Ummat, Head-D2C and Online Sales, Bharti AXA Life Insurance.

Here is a look at some of the common riders that come with a term insurance plan.

Waiver of premium

Your insurance policy ceases to be in effect in case you cannot pay your premiums. This could be for reasons like disability or critical illness of the insured. This rider ensures that the policy stays in effect even if the insured cannot pay the premiums for reasons such as the above which leads to loss of income.

Critical illness

The benefits of this rider kick in when someone is diagnosed with a critical illness during the policy term. A pre-defined lump sum is paid out on the diagnosis of such illness. The list of critical illnesses covered is mentioned at the time of buying the insurance policy.

Accidental death

This rider gives out a larger death benefit to the dependants in case of accidental death of the insured. However, the condition that applies is that reason of death should be among the reasons covered by the rider.

Partial and permanent disability

This rider gives a regular income in form of a staggered payment in case of partial or permanent disability. This is normally a percentage of the total sum assured. The idea is to cover any loss of income due to the disability of the insured.

Income benefit

This provides a regular income to the family of the insured in case of the sudden demise of the insured. Payment is made as a percentage of the sum assured for a period of 5-10 years over and above the payment of the sum assured.

While the riders provide some benefits, don’t add them to your life insurance policy without understanding what they are. “Additional riders should be bought mindfully with a proper reason. They should solve a problem instead of adding an extra burden to the cost. One can select additional riders on the basis of their requirement,” says Naval Goel, Founder and CEO, PolicyX.com.