A term insurance policy provides coverage only against death. However, there are many other unforeseen circumstances during which term insurance may not be helpful. But, you can increase the coverage by purchasing riders. Read on to know more about it.
A traditional term insurance policy serves as one of the best hedges against life’s biggest uncertainty – death. Term insurance entitles the policyholder’s family member (the nominee) to receive the plan’s benefit, i.e., the sum assured in the event of the policyholder’s unfortunate demise while the plan is active. However, in case the policyholder survives the policy term, there is no survival benefit.
While the traditional term policy comes with limited coverage, you can extend its scope and get coverage against other uncertainties like an accident, critical illness, etc., by purchasing add-ons or riders. As the name suggests, the add-ons are additional coverage options that you can buy to extend the term plan’s coverage and get protection against specific risks that are not covered under the main policy.
Today, almost all the insurance companies in India offer various riders for the term insurance policyholders to choose from. You can add any rider you want to your existing policy by paying an additional premium and get coverage against the risk. Some of the most common riders that you can consider buying are discussed below:
- Accidental death rider
This rider provides protection against accidental death. This means the nominee is entitled to receive additional benefit apart from the sum assured of the primary plan in the event of the policyholder’s demise due to an accident.
- Waiver of premium rider
Generally, the term plan expires after the insurance company pays the death benefit to the nominee in the event of their demise during the policy term. But, if the nominee wishes to continue the policy till the actual term, they must continue paying the premium. This is where the waiver of premium riders plays an important role.
The rider entitles the nominee or the beneficiary to continue the policy and receive the benefits without paying the premium; the insurer waives off the balance premiums.
- Critical illness rider
This rider allows the policyholders to get additional coverage if they are diagnosed with any critical illness like cancer or any other disease listed in the policy documents. In the event of any such occurrence, the additional benefits are paid to the nominee.
- Income rider
This rider entitles the policy’s beneficiary to get a particular sum as a fixed income if the policyholder’s demise occurs during the policy term. It is an excellent rider as it allows the family members to get additional compensation to make up for the loss of income due to the policyholder’s demise.
- Disability rider
As the name suggests, the disability rider provides coverage against permanent or total disability resulting from an accidental occurrence. It allows the nominee to get additional benefits in addition to the sum assured of the main plan in case the policyholder suffers from a disability like loss of limbs, permanent damage to the hands or legs.
Thus, there are many riders that you can purchase to extend your term plan’s coverage. Make sure that you carefully assess your specific needs and buy the right rider and get additional coverage.