An Overview Of Different Types Of Riders In A Term Insurance Plan
Term insurance riders are the amendment or attachment in a term insurance policy that offers supplementary coverage to the policyholder. Riders help in strengthening the best term insurance plan by ensuring additional benefits, besides the death benefit.
Most of the term insurance plans come with some or other type of riders. If you have been looking into different term insurance plans, you must have heard terms like ‘accidental death benefit rider’ or ‘critical illness benefit rider.’ So, here’s giving you a brief overview of different types of riders to help you select the best term plan accordingly.
Accidental Death Benefit Rider
During the term of the policy, if the insurer passes away because of an accident, the accidental death benefit rider pays an added sum assured. The percentage of the added sum gets calculated on the original sum assured, and it might vary from one company to another. In many cases, there is a cap placed on the maximum sum assured on the rider. But, the premium for the rider stays for the entire term.
Accelerated Death Benefit Rider
When a person suffers from a terminal illness, their family has to incur heavy amounts for the medical treatments and associated costs. If the person has accelerated death benefit rider in the term plan, the family can have a part of the sum assured in advance. The sum assured payable in advance is specified beforehand in the rider. This is immensely helpful to the family in such a critical time.
Accidental Disability Benefit Rider
When the policyholder is met with an accident that renders them permanently or partially disabled, the accidental disability benefit rider becomes effective. When this rider is included in the policy, the disabled policyholder gets regularly paid for the next couple of years after the accident, in a predetermined percentage of the sum assured. In most cases, the rider only comes into effect if the disability is the result of an accident.
Critical Illness Benefit Rider
This rider makes the policyholder receive a lump sum on the diagnosis of critical illnesses mentioned in the term insurance plan. Most of the major illnesses are included in the critical illness cover, such as paralysis, stroke, heart attack, cancer, kidney failure, major organ transplants, bypass graft surgery, and so on. After the detection of the critical illness, this policy might either terminate or continue as per the terms and conditions.
Waiver Of Premium Rider
The future premiums get waived off if the policyholder is not able to pay those premiums because of a loss of income due to disability or illness. However, the policy continues to stay active. Think of this rider as having all the premium payments insured until the policy expires.
The Bottom Line
Hopefully, you have a clear idea about term insurance riders now. All in all, the riders help you in being financially prepared for any unfortunate occurrences in the future. So, assess your present condition, along with the other features of an insurance policy, before selecting the right term plan and rider.