Monday 23 October 2017
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Why smart people opt for riders along with a term life insurance plan?

Life is unpredictable. You never know when you will wake up to an unforeseen event as big as the death of your loved one or what if tomorrow you might be the one who will have to face death? Hence, the dubious nature of life stands still, making you wander about the uncertainties of your future.

So to help you at times like these, life insurance products have come into being. Shielding you and your family against any financial hurdles, life insurance products have become an integral part of one’s financial exercise. But a single life insurance product that has gained immense attraction due to its wide benefits is a term life insurance plan.

Term insurance plan is a type of life insurance plan that provides financial coverage for a specific period of time. An insurer is required to pay a fixed rate of premium for a specific period of time. If the insured dies anytime during the term of the plan, then the death benefit is paid out to the beneficiaries of the insured. Also, no payout is made if the insured survives the term.


A term insurance plan is a good choice for people who wish to live a stress-free life and build a strong financial future for their family.

Offering you an array of benefits, availing this policy with additional riders enhances the life cover and also lets you secure your family’s future more comprehensively.

The cost for some of these riders are already included in the premium and for others, you will have to pay more. The additional cost of the riders depends on the insurance company you are opting the plan from.

For example, consider this: Sunil Shah, aged 30 years purchased a term plan with a critical illness rider. 3 years after purchasing the plan, Sunil was diagnosed with cancer, he didn’t understand what to do as he didn’t have enough money to get himself diagnosed. That’s when the critical illness rider came to his rescue as the insurance company immediately paid him and now he is living a healthy and happy life. Hence, here Sunil played smart and was saved.

But to be smart like Sunil, you need to understand how these riders work with a term insurance plan

Types of riders for term insurance plan:

Waiver of premium:

Your insurance policy lapses when you are unable to pay its premium. But the waiver of premium is an excellent rider that safeguards the policyholder’s financial interest and ensures that the policy remains in force. With this rider, the policyholder is not required to pay the future premium in the event of an accident or disability.

Critical illness:

Expenses for treatment of critical diseases like heart attack, stroke and kidney failure can cause major financial constraints. But having a critical illness rider with a term plan is beneficial as it shields the policyholder from major medical expenses by providing a lump sum amount for the treatment of the disease. As soon as the policyholder is diagnosed with any critical disease, the insurance company ensures that the treatment is not delayed or ignored due to lack of finance.

Accidental death:
The accidental death benefit rider offers extra financial help to your family along with the sum assured for the term plan. In this type of rider, an extra amount is paid to your family on the account of your death by accident.

Partial and permanent disability:
An accident may not take away your life, but it can cause permanent or partial disability restricting you from doing your daily work by yourself and also affecting your source of income. In such cases, 100% sum assured is paid to the insured in the event of total and permanent disability.

Income benefit rider:
Usually, the death benefit is paid out in the form of a lump-sum amount, but the income benefit rider lets you decide the payment option i.e. whether you would like your beneficiary to receive payment on a monthly basis. This rider offers monthly income to the nominee on death of the life assured.

Though your premium will increase when you buy a rider, but it’s always good to look at the bigger picture, considering the uncertain nature of life. Also, by reading about the above riders, you would have clearly understood about the benefits and how they will be a great financial tool in helping you secure yourself and your family’s financial future too. Although, diseases like heart attack, stroke or an event like an accident or say death may not necessarily knock your door at an early stage, but prevention is always better than cure and it’s good to keep your family and yourself protected under any circumstances.

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