Customization of products is the mantra of today and the financial world is not far behind. Be it life insurance, health insurance, SIPs or any other investment or loan product, companies are looking forward to come up with tailor made products and options to cater the needs of buyers belonging to different backgrounds.
Term insurance, the most popular and simplest form of insurance in the world too is a customizable insurance product. Insurance companies have made it possible through optional riders, without disturbing the simplicity of a basic term insurance policy.
Typically, following riders are popular term insurance add-ons that can be customised to your need. It also provides flexibility besides basic life cover.
Accidental Death Rider
Opting for this rider offers you additional sum assured if the death of the insured is caused by any accident. However, there’s a myth among the customers that the sum assured is only paid in case of death. Even if you don’t subscribe to this rider, you will still be paid the basic sum assured. For example, if you have a term plan of Rs 10 lakh, and an additional rider worth 5 lakh, your nominee is eligible to receive a total of Rs 15 lakh upon your unfortunate death due to any accident during the policy tenure.
Critical Illness Rider
With current fast-paced lifestyle, encountering with any form of critical illness is nothing surprising. In that case, this rider provides as additional benefit through a lumpsum payment if the policyholder is diagnosed with any critical illness as listed in the policy document or specified in the rider clause. Some of the most critical diseases commonly included in the list of various insurers include cancer, stroke, heart disease, coronary artery bypass graft surgery, kidney failure and paralysis. After a critical illness is detected, your policy might continue or get terminated as per the policy document. Hence, it is advisable to understand the T&Cs of this rider before signing on the dotted line.
Waiver of Premium
Imagine that your term insurance plan is active and due to some unfortunate incident your income stops and you are unable to pay further for your premium – what would you do then? In this critical situation, a Rider of premium waiver comes handy. It safeguards you against such eventuality. This rider actually waives off all future premium if satisfactory reason is being provided to the insurer, however the protection and coverage offered by the term plan remains unchanged for the pending tenure of the policy.
Partial and Permanent Disability Rider
This particular rider allows you to receive a certain pre-approved percentage of the sum assured over the next few years as per the clause agreed, if you become physically disabled partially or fully, as an outcome of any disease or accident. This payment generally becomes an income replacement for the policyholder, who might miss income during that period. This rider usually comes along with the accidental death rider, hence check about this before signing on the dotted line.
Income benefit Rider
This rider is vital, incase the sole breadwinner of the family passes away; his family and dependants get a supplementary income annually for next 5 – 10 years along with regular sum assured. In general, insurance companies pay 10 - 15% of the sum assured additionally, for a specified period. This in turn helps the nominee to receive a regular monthly income. Riders usually come with a negligible annual premium, which can be added along with the regular insurance premium. When term insurance plans are clubbed with various riders, one can get a comprehensive coverage at lower premiums, making it an ideal combination.
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