Most term insurance plans come with a host of riders for a policyholder to choose from. Now, riders are the added benefits that can be purchased along with a term insurance plan. They are a way to enhance the existing benefits of the term plan. Think of them as offering additional assistance to a family in need after the sudden death of the policyholder. Choosing the right kind of riders is extremely important in this regard. Thus, here’s a list of the six most important riders for you to consider.
#1 Accidental Death Rider
As the term suggests, this amount helps the beneficiary get an extra amount over the sum assured in case the policyholder passes away in an accident. The additional sum depends on the actual sum assured and tends to be different for different insurers. At times, the extra benefit is equal to the face amount of the actual policy. Thus, the benefit is doubled, which is immensely helpful in solving the financial woes of the family of the deceased.
#2 Accelerated Death Rider
In this case, the policyholder can withdraw a part of the death benefits if diagnosed with such a terminal disease that can lead to an untimely death. As per the HDFC Life Term Policy, the policyholder gets an advance on the death benefit meant for the beneficiary. Insurers deduct the amount and the related interest from the money received by the beneficiaries upon death.
It is important to note that the definition of terminal disease is not the same for every insurer. Thus, the insured might not get the benefits if their disease is not listed by the insurer.
If a policyholder takes this rider, then all their future premiums can be waived off under special circumstances. The circumstances are either loss of income or permanent disability due to an illness or injury. When the sole breadwinner of the family is unable to work, its impact on the family can be devastating. Therefore, the insured is allowed to stop paying the premium on their base policy until they can find another source of income.
#4 Guaranteed insurability rider
With this rider, the policyholder can buy extra insurance cover without any medical examination or additional application hassles. This is the rider that comes in handy when there have been major developments in life, such as a promotion that significantly increases the income or the birth of a child that brings new responsibilities.
#6 Income rider
This is a type of death benefit where the beneficiary gets an added income per annum for a particular number of years after the policyholder’s demise. The regular income comes in addition to the sum assured, which helps the family sail through the tough times.
The bottom line
Though five riders are mentioned here, you will find more options available under your term insurance plan. Apart from choosing one or more of these five options, you can look at the other choices and consider them as well.