What if life were to give you a warning for something when it is about to happen? What if a message appeared before a health issue occurred that would read, “Get ready, something big is approaching”? Unfortunately, life doesn’t give us warning signs. It catches us when we are not looking. That’s why most people buy term insurance, a backup for their family members. But did you know something? Your term insurance can do more, too.
The secret? Riders. These are like special add-ons that make your basic term plan stronger, smarter, and more useful when life throws a curveball.
What Exactly Are Riders?
Think of your term insurance as a strong wall protecting your family. Now, imagine adding security cameras, alarms, and extra locks to that wall. That’s what riders do. They add extra benefits to your basic policy for a small extra cost.
A basic term insurance policy pays your family in case anything untoward happens to you. However, what if you survive an accident and are unable to work? What if you are diagnosed with a serious illness? Riders come into play at such moments and ensure that you don’t have to think about money when life is tough.
Why Buy Term Insurance with Riders?
When you buy term insurance, you already provide financial security for your family. The fundamental features of term insurance, high coverage at minimal premium, easy terms, and speedy claim settlements, are already excellent. But life is not one-size-fits-all, right? That’s where riders play their part.
Riders allow you to tailor your policy to suit your life. You travel frequently, have children at school, or are concerned with health issues? There’s a rider for you. And the premium? Substantially lower than the anxiety you will steer clear of in bad times.
Best Riders That Matter
These are the most popular riders individuals opt for when enhancing their term insurance plans:
1. Accidental Death Benefit Rider
Accidents happen suddenly, and they can change everything within seconds. With this rider, if you pass away due to an accident, your family receives an extra payout on top of the sum assured.
Example: If your term plan is for ₹50 lakh and you have an accidental death rider of ₹20 lakh, your family will get ₹70 lakh in the event of accidental death. This additional amount can be used to pay off loans or secure your children’s future.
2. Accidental Disability Rider
Not all accidents are fatal, but others cause you to become permanently or partially disabled, which can impair you from working. This rider provides you with a payout if you are disabled so that you still have funds to take care of day-to-day activities and medical bills.
Example: A delivery executive who got hurt in a road accident was given a consistent monthly settlement by means of this rider, and he could cover rent, medicines, and groceries despite not being able to work.
3. Critical Illness Rider
Critical illnesses such as cancer, heart attack, or kidney failure may be costly. This rider gives you a lump sum on diagnosis of any specified critical illness. That amount can help with hospital expenses, medication, or even living expenses during your convalescence.
Example: A software engineer who was diagnosed with cancer utilised her critical illness rider payment to pay for costly treatments without touching her family savings.
4. Waiver of Premium Rider
If you experience a permanent disability or critical illness and are unable to pay future premiums, this rider keeps your policy in force. You cease making payments, but your loved ones remain fully protected.
Illustration: After being injured in an accident, a store owner was unable to work for several months. With this rider, he did not lose his term insurance when his income was halted.
5. Income Benefit Rider
Rather than merely a lump sum, this rider allows your family to receive regular monthly payments upon your death. This regular income helps in dealing with household expenses and education fees smoothly.
Example: A family that received ₹50,000 per month for 10 years upon the policyholder’s demise was able to sustain their routine life without any financial issues.
6. Return of Premium Rider
Some individuals believe term insurance provides nothing in return if they live. For them, this rider pays back all premiums in the event they outlive the policy.
Example: After 25 years of coverage, a policyholder received all the money he had spent on premiums, which he utilised for retirement savings.
Why Riders Are Worth Every Rupee
- Cost-Effective: Small additional cost, but big additional coverage.
- Customised Protection: Choose riders that meet your life, work, and health requirements.
- Peace of Mind: You and your loved ones have financial support for more than one circumstance.
How to Choose the Right Riders
- Understand Your Life Risks: Travel often? Select accidental coverage. Concerned about health? Select a critical illness rider.
- Check the Price: Make sure the additional premium suits your pocket.
- Know the Terms: Read the fine print well so there are no surprises at claim time.
- Choose a Good Insurer: Select one with a good claim settlement track record.
Conclusion
A term insurance policy is among the best financial choices you can make for your family. But why just do the minimum when you can do better? Adding riders is like moving from a base model car to one that comes with airbags and ABS; it’s safer and wiser.
So, the next time you purchase term insurance, consider the riders on offer and select the ones that fit your lifestyle best. A few extra dollars today might be able to protect your loved ones from a hefty financial burden in the future. Although life is uncertain, your protection doesn’t need to be.