Life insurance companies offer add-on plans to take care of risks that are not covered by the term policy
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Customisation of products is the mantra to customer endearment today and the financial world is not far behind. Be it life insurance, health insurance, systematic investment plans, any other investment category, or loan products, companies are looking to come up with tailor-made products and solutions to cater to the needs of buyers belonging to different backgrounds.
Term insurance, the most popular and simplest form of insurance in the world, is a customisable insurance product too. Insurance companies have made this possible through optional riders, without tampering with the simplicity of a basic term insurance policy.
Popular Term Insurance Riders:
Here is a list of popular term insurance riders that can provide added flexibility, apart from a basic life insurance cover. The basic sum assured as per the term insurance policy remains unchanged and these riders come with additional premiums.
Accidental Death Rider:
Opting for an accidental death rider means that you can get additional coverage if you happen to meet with accidental death during the policy tenure. For example, if you have a term insurance plan of Rs 10 lakh and an additional accidental death rider add-on worth Rs 5 lakh, your nominee would get a total of Rs 15 lakh upon your unfortunate death due to an accident during the policy tenure.
Waiver of Premium:
Have you ever thought what would happen to your term insurance plan premiums if you happen to be physically disabled or if you happen to lose your income for any reason? The waiver of premium rider helps in safeguarding against such eventuality. If this rider clause is taken, the future premiums will be waived by the company if the reason is satisfactory. The protection offered by the term plan remains unchanged for the pending tenure, even if the premiums are waived off under any conditions.
Critical Illness Rider:
If you opt for a critical illness rider, you can get an additional benefit of a lump sum payment if diagnosed with any critical illness. Most of the critical diseases like cancer, heart disease, kidney failure etc are covered in most critical illness riders. Since some term insurance companies terminate the term insurance policy once a critical illness disease is detected, it is essential to read the terms and conditions of the rider clause before signing on the dotted line. This can be useful, as most critical illness would cause high medical expenses.
Partial and Permanent Disability Rider:
A partial and permanent disability rider allows you to receive a certain pre-approved percentage of the sum assured over the next few years as per the rider clause, if you happen to be physically disabled partially or fully as an outcome of any disease or accident. This payment can be used to replace the income that the policyholder may lose during the period. Usually, life insurance companies offer permanent and partial disability rider along with the accidental death rider. So, it is imperative to check about this with your insurance firm.
Income benefit Rider:
If you are the sole breadwinner for your family, it is good to opt for an income benefit rider. Under this rider’s provisions, the insurance company pays out a monthly or quarterly income to the nominee for 5 to 10 years. This is in addition to the sum assured opted. Usually life insurance companies pay 10-15 per cent of the sum assured additionally, for a certain period. This helps the nominee to receive a regular monthly income.
An overview of term insurance plans:
Term insurance plans offer a lump sum protective coverage to the insurer with the payment of a small premium, making it a very cost effective option for anyone. The lower premiums of term insurance policies mean that anyone with limited money for investment can opt for this protective plan.
But, being a low premium product, term insuran-ce plans come with certain limitations. Unlike other high premium insurance products, term insurance plans do not offer investment benefits, returns or flexibility, but only a lump sum payment upon the death of the insured.
Today, insurance companies are going one step ahead by introducing riders along with term plans, making it more attractive for buyers, so that the charm of the product will not be lost amidst other insurance products.
( Source : deccan chronicle )
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