Term insurance riders: All you need to know

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Term insurance policies are the simplest form of life insurance. It helps to cover future eventualities and secure one’s family. On the other hand, a rider is an additional cover along with basic insurance policy. Policyholders can opt for a term insurance rider with their base policy by paying extra cost. Generally, the additional premium is very low which most purchasers of policy can easily afford. Different insurance companies offer different term insurance riders under their term insurance plans. So, before purchasing any term insurance plan it is important to know all about these.

Types of riders

Different types of riders come with their own terms and conditions. The cost also differs. Take a look on some most important term insurance riders which most of companies offers to its customers along with base policy:

1) Accidental death benefit rider

If the policyholder passes away during the policy term due to an accident, this rider pays an additional sum assured to the beneficiary. The percentage of this additional sum is calculated on the original sum assured. It may vary from company to company.

2) Accelerated death benefit rider

If the policyholder opts for this rider and has been diagnosed with a terminal illness like cancer, asthma, kidney failure, lung damage, the family receives a part of the sum assured in advance. Generally, the cost of this rider is very low.

3) Critical illness benefit rider

This is one of the most important riders that one can opt for with a term insurance. Under this rider, the insured can receive a lump sum amount on diagnosis of listed critical illnesses as specified in the policy document.

4) Accidental disability benefit rider

In the unfortunate event of an accident, if the policyholder suffers from partial or permanent disability, he/she can be benefited by this rider. Most policies pay the disabled policyholder a percentage of the sum assured for a period of five to 10 years following the accident.

5) Waiver of premium rider

Under this cover if the policyholder is not able to pay premiums, either due to disability or income loss the future premiums are waived off and the policy will remain active till end of the term.

6) Income benefit rider

Income Benefit Rider can generate income after the death of the policyholder. If a policyholder opts for this rider with the basic policy his or her family would get additional income annually for five to 10 years, along with the regular sum assured.