Term insurance riders are the add-ons provided by the insurance companies to add extra layer of protection over your basic term insurance policy. Critical illness, accidental death benefit, permanent disability, waiver of premium and terminal illness are some of the important riders worth considering while purchasing your term plan. Some of these riders are inbuilt with the plan and few are optional for you to add based on your needs.
Let’s break them down to understand how these riders add value to you.
Key term insurance riders: Which add-ons are worth it
1. Critical illness rider
Imagine this scenario. You’re 45, in the middle of your career, managing EMIs and kid’s school fees. Suddenly, you’re diagnosed with a serious illness. You are now making frequent visits to the hospital, getting tests done and ensuring that you follow a schedule for treatment. During such times, you are unable to work like before. However, expenses don’t stop.
A critical illness rider helps in such situations. The insurer pays you a lump sum if you’re diagnosed with a covered illness. This money can cover hospital bills, medication and alternative treatments helping you focus on recovery.
Who should consider it?
- If your family history includes major illnesses (like cancer or heart disease).
- If you’re employed with marginal employer health benefits.
- If you want financial support without depending on savings.
2. Accidental death benefit rider
Road accidents in India are frequent. It can leave a family without an earning member overnight. The accidental death benefit rider is useful if an unfortunate event occurs due to an accident. In such a situation, your family gets an additional payout. Remember, this is over and above the base term insurance amount. This is crucial, especially for families with sole breadwinners.
The sudden loss of income can leave dependents struggling with unpaid home loans, education costs, and daily expenses. A higher payout means they have enough funds to continue with their goals after you.
Who should consider it?
- If you travel frequently, especially by road or bike.
- If you work in a high-risk job (construction, law enforcement, mining etc.).
- If you’re the primary earner in your family.
3. Accidental total and permanent disability rider
A serious accident can also cause disability. This can be sometimes temporary or sometimes permanent. If you can’t work due to an accident-related disability, how will you manage expenses? This key rider provides financial support if an accident leaves you permanently disabled. This payout can replace lost income, fund medical care, etc.
Who should consider it?
- If you work in a physically demanding job.
- If you’re self-employed and don’t have employer-backed disability benefits.
- If you want a financial cushion for worst-case scenarios.
4. Waiver of premium rider
Let’s say you suffer a critical illness or disability and can’t work anymore. Practically speaking, paying insurance premiums may not be your priority when hospital bills are piling up! With a waiver of premium rider, you don’t have to worry. If you become disabled or critically ill, future premiums are waived off. The good news is that your term plan continues as usual. The premium waiver rider keeps the coverage intact even when times are tough.
Who should consider it?
- If you have dependents and long-term financial commitments.
- If you don’t have significant savings to fall back on.
- If you’re worried about keeping your insurance active in case of an emergency.
5. Terminal illness rider
This rider is also called as living benefit. If you are diagnosed with a terminal illness, then your term plan will provide you a payout upon diagnosis. You can use these funds for your treatment, medical costs, and other financial needs.
Small add-ons, big protection
A term insurance policy secures your family’s future, but life’s uncertainties don’t stop there. Critical illness, disability, or accidents can impact finances even while you’re alive. That’s where term insurance riders come in. They provide extra layers of protection when life takes an unexpected turn. You can use the online term insurance calculator to estimate your premium with the riders added to your plan.
Choosing the right riders may help cover medical costs, lost income, or ongoing expenses, ensuring your loved ones aren’t financially burdened. While they slightly increase premiums, the peace of mind and financial security they offer are invaluable.
