When it comes to monetary security, term insurance is most likely the best tool in our hands. It is convenient, you pay a fixed amount (premium) every year, and if anything adverse befalls you within the policy term, your family will get the amount assured. They can utilise this amount for everyday expenses, loan repayment, and maintaining the same lifestyle.
But here is a little-known secret: you can make your term insurance even more powerful. How? By adding riders.
Riders are small features on your policy that give you extra benefits for a small extra price. Think of them as extra toppings on a pizza, the base is your term insurance, but the toppings make it special and to your own specification.
Why Riders Are Important
Life is unpredictable. Your typical term insurance will cover you if you pass away due to natural causes or an accident, but what about something like a critical illness, disability, or loss of income? Riders can help then. They give you extra protection without your having to buy an entirely new policy.
Riders are designed to handle specific situations. That lets you select and choose the ones that fit your lifestyle, health requirements, and life goals. The best part? They are affordable, and the premiums you pay for most riders can also benefit from tax benefits under Sections 80C and 80D of the Income Tax Act.
Know Your Coverage with the Help of Tools
Before buying any rider, you must know how much coverage you actually need. For example, if you are considering buying a 5 crore term insurance plan with some riders, you can use a term insurance calculator. This simple web-based calculator will tell you about the premium amount you will have to pay for your needed coverage based on your age, income, and policy term. It helps you plan better and keeps you from spending too much.
With these types of tools, you are able to balance a high sum assured amount, like 5 crore, and the right set of riders that are within your affordability.
Top Riders You Should Consider for Your Term Insurance Policy
Some of the most beneficial riders that can increase your term insurance policy and make it more suitable to your needs are as follows:
- Accidental Death Benefit Rider
Life is unpredictable, and accidents or mishaps can happen to anyone. This rider will offer your family more money if you pass away due to an accident.
Illustration: If your term insurance sum assured is ₹1 crore and you buy an accidental death benefit rider of ₹50 lakh, then in case of death by accident, the family receives ₹1.5 crore.
It’s especially helpful if you travel often or have a hazardous working condition.
- Critical Illness Rider
This rider gives you a lump amount in the event of diagnosis with a severe illness like cancer, heart attack, stroke, kidney failure, or major organ transplant.
You can use the money from this rider for treatment, hospital bills, or even living allowances if you are not working. The critical illness treatment could be very expensive, and this rider helps to ensure you don’t deplete your savings.
- Waiver of Premium Rider
What happens if you fall sick or become critically ill and cannot work? How will you be able to pay your insurance premium?
With this rider, if you become disabled or critically ill, the insurance company will waive future premiums. Your policy will continue without you paying anything at all, and your loved ones will still be insured.
- Accidental Disability Benefit Rider
This rider provides monetary support if you get partially or totally disabled due to an accident. In some cases, the benefit is paid out in a lump sum, and in others, it is paid out as periodic income for a few months.
It’s especially important if your job or lifestyle is travelling, driving, or working in high-risk areas.
- Income Benefit Rider
This rider provides your family with a steady monthly income for some years after your death.
Illustration: As opposed to providing your family with just a lump sum, this rider ensures they receive ₹50,000 per month for 10 years too. This can assist them in paying routine expenses without having to invest the lump sum amount themselves.
- Terminal Illness Rider
If you are diagnosed with a serious illness and the doctor states that you might not live longer than 6–12 months, this rider pays you the amount assured immediately. You can use this amount for treatment, fulfilling last desires, or for taking care of your family while it is not too late.
Things to Keep in Mind Before Adding Riders
- Know Your Needs: Don’t buy all rider just because it’s discounted. Look at your work, health, family, and lifestyle needs.
- Look at the Cost: Riders are inexpensive, but you pay heavily if you buy too many. Look it up using a term insurance calculator if you can afford it.
- Read the Terms: All riders have terms and conditions. The critical illness rider, for example, will tell you what illnesses it covers. Read them extremely carefully.
- Choose the Right Sum Assured: In case you are choosing a high cover of 5 crore term insurance, make sure that the riders are also adequately covered to fulfill your needs.
- Tax Benefits: Some riders offer tax benefits. Find the ones which fall under Section 80C or 80D.
Conclusion
Your term insurance policy is your shield against the uncertainties of life. Yet just as a shield can be made stronger through additional layers, your policy too can be made stronger through riders.
The proper riders protect you from hazards besides death like accidents, severe illnesses, disability, and loss of earnings. They give you peace of mind, knowing your loved ones will be well provided for in almost any situation. Thus, before buying or renewing your policy, think of your needs, check your budget, and have a term insurance calculator to see the cost and benefits. If you feel your family needs are greater, like a 5 crore term insurance, plan ahead and choose riders that offer you full cover.
Finally, it’s not a matter of buying insurance, it’s a matter of buying the right insurance with the right riders. That is what will actually make your term insurance policy sturdy and future-proof.