term insurance riders

What is a Term Insurance Rider?

In a term insurance plan, a rider is a provision of the same. These are used in insurance policies to change the terms of what would otherwise be a basic insurance plan and add benefits to the same. Through riders, you can get extra benefits such as extra coverage. At times, these riders could limit and restrict your coverage as well. You also need to keep in mind that if you decide to add riders to your policy you would have to pay a higher premium than what may have otherwise happened. However, since in most of these cases, you need little underwriting the difference is not significant as such.

The riders of a term plan are also referred to as insurance endorsements. It can be added to all kinds of policies such as life, homes, rental units, and automobile insurance plans.

Types of Term Insurance Rider

Premium Wavier Rider:

The premium waiver rider offers a valuable benefit wherein the insurance company will waive the policy premiums if the insured person becomes permanently disabled or loses their income during the coverage period due to illness or injury. However, there is a specific age limit for eligibility to receive this benefit. It is widely recognized that the disability of the primary wage earner can have a devastating impact on the entire family. Generally, a term insurance policy lapses when premium payments are discontinued. Nevertheless, with this rider, if the policyholder experiences a sustained period of injury or disability, or passes away, all future premiums that would have been due will be waived. The beneficiary of the policy will receive the death benefit according to the normal terms and conditions. Additionally, this rider also covers cases of permanent or partial disability.

Accidental Death Benefit Rider:

If you are buying term insurance online this is one rider that you should think of buying as well. This rider becomes effective when you are involved in an accident and become disabled – permanently or partially. As part of this rider, you get a certain part of the sum assured regularly till the time you are covered by the policy. The period for which you receive the money tends to vary from 5 to 10 years. So, it became a valuable source of income in those days. Certain insurers also combine them with the accidental death benefit rider. 

Accelerated Death Benefit Rider

This is one of the many beneficial insurance riders that you get with this plan. Let us say that you – the insured – are suffering from some terminal illness. As it is, your family is under tremendous grief. On top of that, they are also spending a lot of money to provide you with the best medical treatment they can. There are other associated costs in these cases as well. The money that you get from this particular rider comes in really handy in such medical emergencies.  

Critical Illness Rider:

A lot of people, who buy a term plan online, look for this particular rider. As per this rider if you are diagnosed with any critical illness in the coverage period the insurer will pay you a sum assured against the rider. Normally, in these cases, your insurer has a list of diseases it would cover. The number could vary anywhere between 8 and 40 depending on the insurer you get the policy from. This rider will help you in getting a payout when you are diagnosed with any of the listed critical illnesses in the policy. The list generally contains diseases like cancer, kidney failure, heart attack, etc. The critical illness sum assured will be paid out in such an event. You can never know when this might come in handy.

In most cases, these policies include all major critical illnesses such as the following:

  • cancer
  • bypass surgery
  • heart attack
  • kidney failure
  • stroke
  • organ transplant
  • paralysis

Family income benefit rider

In such insurance riders, if you die within the policy coverage period your family would receive a steady stream of income from the insurer. However, when you are purchasing this rider you need to make sure that you get right the period for which this benefit would be applicable. There are some obvious advantages of such a rider. This way, even in case of your death within the coverage period your family would have fewer financial issues to contend with. The regular monthly income it gets from the lender would keep it afloat easily in these cases.

Benefits of Term Insurance Riders 

There are several benefits that you can gain when riders are added to your term insurance plans. In some of these, you can save more money while in others you can get different kinds of coverage in the same head. This means that you can cover your home and car from the same insurer – you do not have to purchase a separate policy for the same. In some of these term insurance policies, you also have the freedom to buy separate coverage at a later date.

How can Riders be bought?

When you buy term insurance online, you will get an option to add these riders. You are supposed to buy the policy as you normally would, and then add riders as per your needs. The list of the riders will be sent to you. However, make sure that you buy these riders at the time of buying a new policy. Once you have purchased the policy, you will not be able to add these later on. Therefore, it is worth spending a considerable amount of time before you finally decide to buy the term plan. These riders come with certain terms and conditions. Hence, you need to spend time to understand them as well. You must decide after considering every aspect.

Scroll to Top