To make sure that your loved ones are protected even in the worst of scenarios, a term plan can come to your rescue. A term plan makes sure that your family receives a huge payout in the case of your untimely death.
However, that may lead you to believe that term insurance is a one-dimensional product. While the policy heavily focuses on life coverage, there are multiple aspects to it. Even though term insurance offers a large amount of money at the time of a claim, there is a lot more that a policyholder’s family needs after their death. These needs can be fulfilled through term insurance riders.
Understanding Term Insurance Riders
Riders are benefits that the insurance provider offers in addition to the basic coverage. The additional piece of coverage depends on the rider you buy. There are numerous riders that come with different features and offer a wide range of benefits. But, since they cost extra money, you have to choose the right ones that you would require and make sure you can afford them.
Benefits
- Riders offer extra coverage. These pieces of extra coverage allow you to shape your policy to your requirement. Hence, if you end up buying a policy that does not have all the features that you want, you can add riders to turn the plan to your liking.
- While term insurance has its own set of tax benefits on the basic coverage, it also has tax benefits on the additional riders.
- Riders allow you to do financial planning better. While you would have to save extra money on having the benefits you want out of the policy, riders make sure, you get them with the policy. This way, you don’t have to worry about life coverage and can spend your money on other investments.
Types of Term Insurance Riders
Increasing coverage rider
Term insurance is taken so that your family’s needs aren’t left unfulfilled in the case of your death. However, with time, these needs evolve and grow. Hence, the cover amount you choose today may not be enough in the future. To solve this problem, you can get an increasing coverage rider that allows you to raise your cover amount by a fixed percentage each policy year.
Accidental disability rider
Term insurance ensures your family has enough money when you cannot provide for them. Apart from death, this also includes disability. If you get into an accident and are left permanently disabled, this rider ensures that your family is financially covered.
Critical illness rider
Often associated with health insurance, critical illnesses are a category of health disorders that are often highly life-threatening. These include rare heart conditions, various types of cancer, and many more. Since these illnesses are expensive to treat, they require extra coverage. So, a term policy offers coverage for critical illnesses as an additional rider. The rider’s term insurance benefit is that it will cover you against any critical illness that is listed within the insurance provider’s offering.
Income rider
If you are the only earning member of the family, your death would not just mean losing a loved one to your family, it also means losing their financial support. In your absence, they will need a regular income to sustain their lifestyle. This can be given to them through the income rider. As per this add-on, your family will receive money as a regular income apart from the cover amount that the base policy offers.
Make sure to keep a note of the various term insurance riders for further protection basis your needs and affordability.
