What is a term insurance rider? Know why it is important and what are its benefits In 2022

What is a term insurance rider? Know why it is important and what are its benefits In 2022

Friends, with the help of this article, today you will know what is Term Insurance Rider. What is a term insurance rider and which rider should you take or not?

If you read this article till the end, you will not need to ask anyone which rider is right for you. First of all let us understand what is a rider?

What Is Term Insurance Rider?

A rider is a type of addon cover. This add-on comes with a base plan (insurance policy).

Talking about the base plan, the base plan can be of many types like health insurance, term insurance etc.

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Let us take the help of an example to understand the rider-

A base plan is offered to you when you book a flight ticket. On booking flight tickets according to this plan, you will get-

Check-in Baggage- 15kg, and Hand Baggage- 7Kg is allowed.

There is 1 seat on which you can sit and go,
And you are transported from one place to another.
You get this facility on booking tickets with the help of base plan. Now let’s understand what a rider is.

  • If you want to carry more luggage, then you have to take extra luggage addon for that.
  • If you want a seat with more leg space, then you have to pay extra for that.
  • If you want to eat food on the flight, you will have to get a food add-on.
  • For such requirements, you have to take a rider plan which gets added to your base plan.

Similarly, a rider plan is offered to you in term insurance. You can add these riders as per your requirement with your base plan i.e. your term insurance.

Each term insurance rider covers a different type of risk. The rider premium is a percentage of the cover amount of the base plan.

What is a term insurance rider?

For example- If you take a cover of 1 crore term plan and together you want to add co-rider plan.

In this case, the cover amount of the co-rider can never exceed the cover amount of the term plan and will always be less than the cover amount of the term plan (in certain percentage of the cover amount of the term plan).

Why Should We Take Term Insurance Riders?

Taking a term insurance rider is easy. Along with the documents you need for the base plan or the medical test, you also get a rider plan.

You do not have to do any extra hustle and bustle to get a rider plan, and thus you are able to save your time as well.

Also, you do not have to manage any other policy separately for this.

Types Of Term Insurance Riders

There are 4 most bought riders, their names are as follows-

  • Critical Illness Rider
  • Waiver of Premium Rider
  • Accidental Death Benefit Rider
  • Accidental Disability Rider
  • And there are some other term insurance riders also like-

Income Benefit Rider

  • Accelerated Death Benefit Rider
  • Child Support Benefit Rider

Let us now understand these riders one by one-

Critical Illness Rider

What is a term insurance rider?

Critical illness means serious illness. If you suffer from any kind of critical illness, then the insurance company gives you a fixed amount.

You get this amount when you have taken Critical Illness Rider along with your base plan.

There are two types of critical illness riders, Accelerated and Comprehensive. Let us understand these two riders with the help of an example-

  1. Accelerated Plan:
  • Term plan cover amount: ₹1 crore
  • Critical illness rider cover amount: ₹30 lakh
  • Medical emergency claim amount: ₹30 lakh
  • Current Total Cover Amount: ₹70 Lakh
  • Suppose you bought a term plan in which you have got term plan cover amount – one crore. Along with this, you have also taken the cover of a Critical Illness Rider, whose cover amount is ₹ 30 lakhs.

Now if you face any serious illness then your insurance company gives your Critical Illness Rider cover amount (₹30 lakhs) to you.

In such a situation, the cover amount of your current term plan reduces from ₹ 1 crore to ₹ 70 lakh balance.

Comprehensive Plan:

  • Term plan cover amount: ₹1 crore
  • Critical illness rider cover amount: ₹30 lakh
  • Medical emergency claim amount: ₹30 lakh
  • Current Total Cover Amount: ₹1 Crore
  • Suppose you have bought a comprehensive term plan in which you have got the term plan cover amount – one crore. Along with this, you have also taken the cover of a Critical Illness Rider, whose cover amount is ₹ 30 lakhs.

Now if you face any serious illness then your insurance company gives your Critical Illness Rider cover amount (₹30 lakhs) to you.

In such a situation, the cover amount of your current term plan will remain ₹ 1 crore only your Critical Illness Rider cover becomes zero.

Right now a question might have come in your mind that critical illness cover is available in standalone policy as well as in rider. Which plan should we take?

Standalone Policy Vs Rider Plan

Cover Amount:

Friends, if you take a rider plan, then you will get limited cover, because we have already told you that the rider cover is always more effective than the base plan cover.

If you take a standalone policy, then you can choose your cover amount as per your wish.

Illness Limit:

Many companies do not cover the initial stage of any critical illness but cover the advanced stage when you take rider cover.

On the other hand, if you take a standalone policy then you will not face this problem and your cover will start from the initial stage of any critical illness.

Documentation:

You will not have to do anything separately in the rider plan, you will get your rider cover in the documentation and medical test for the base plan.

Whereas in a standalone policy, you have to get both documentation and medical tests done.

Base Plan:

It is essential to have a base plan when you take rider cover, and there is no such restriction when you go for a standalone policy.

Effect On Premium:

When you take a critical illness cover as a rider, the premium remains the same for the entire cover period.

Whereas when you take Critical Illness cover as a standalone policy, your premium will keep on increasing every 3-4 years.

Cover Period:

The cover period of the rider is dependent on his base policy, as soon as the cover period of the base policy ends, your rider’s cover period will also end.

You will not get any rider benefit after the cover period of the base policy is over.

On the other hand, if you take a standalone critical illness policy, you can renew it for life.

Cost of Premium:

If you are of age, then the premium of rider cover or standalone policy will not make much difference to you. As your age increases, you come to know the difference in the premium of both.

If you are of age then you should take a standalone policy.

If you are over the age and feel that the premium for a standalone policy is beyond your budget, then you should opt for a Critical Illness policy as a rider, but do take it.

Waiver Of Premium Rider

As you have seen, you get two types of plans in Critical Illness Policy, Standalone Policy and Rider Plan.

You must take this rider because this rider helps you in two situations-

  • If you have any serious illness or
  • You may become disabled due to some kind of accident.
  • In both these cases, you get the convenience that you do not have to pay any further premiums. This will give relief to your family from financial crunch, so definitely take this rider.

Accidental Death Benefit Rider

Accidental Death Benefit Rider

If you die in an accident that is covered by your term insurance, then you get the benefit of the cover of the Accidental Death Benefit Rider.

For example-

Let’s say you died in a road accident and you have taken Term Insurance of Rs 1 crore along with Accidental Death Benefit Rider (Rs 30 lakh) cover.

In such a situation, your family gets a cover amount of ₹ 1 crore 30 lakh.

Your shortage cannot be removed with this money, but with a financial help, the burden of many types of responsibilities can be lightened.

Accidental Disability Rider

Accidental Disability Rider helps you if you become disabled due to an accident. Disability is divided into 4 categories-

  • Total Disability
  • Partial Disability
  • Permanent Disability
  • Temporary Disability

If a person has an accidental disability, then he may have to face a lot of financial problems, because due to the disability, that person may not be able to do his work at all, or he may not be able to do any work at all. Very likely.

In such a situation, the source of income of that person becomes less or ends. Also, the cost of his treatment is also very high.

In such a situation, it is possible to be short of money to a great extent, so if you take Accidental Disability Rider then you can get relief from many problems.

Now maybe a question has come in your mind whether to take rider cover for accidental disability or buy a standalone policy?

Friends, if you take rider cover for accidental disability and accidental death, then many times it happens that the insurance company does not consider it as accidental.

In such a situation, you do not get the cover amount of your rider cover on time, as well as the cover amount of your term insurance is also not available.

That’s why I would like to tell you that it would be better if you take a personal accident policy for both these covers.

Almost every type of accident and disability is covered in a personal accident policy and you can also choose your cover amount according to it.

In such a situation, your family members will feel proud of you not considering you as a burden that you had taken such a right decision in time.

Friends, this was the 4th most commonly taken term insurance rider cover.

Let us now know about some more riders that you can take with your term insurance.

  1. Waiver Of Premium Rider

As you have seen, you get two types of plans in Critical Illness Policy, Standalone Policy and Rider Plan.

You must take this rider because this rider helps you in two situations-

  • If you have any serious illness or
  • You may become disabled due to some kind of accident.
  • In both these cases, you get the convenience that you do not have to pay any further premiums. This will give relief to your family from financial crunch, so definitely take this rider.

Accidental Death Benefit Rider

If you die in an accident that is covered by your term insurance, then you get the benefit of the cover of the Accidental Death Benefit Rider.

For example-

Let’s say you died in a road accident and you have taken Term Insurance of Rs 1 crore along with Accidental Death Benefit Rider (Rs 30 lakh) cover.

In such a situation, your family gets a cover amount of ₹ 1 crore 30 lakh.

Your shortage cannot be removed with this money, but with a financial help, the burden of many types of responsibilities can be lightened.

Accidental Disability Rider

Accidental Disability Rider helps you if you become disabled due to an accident. Disability is divided into 4 categories-

  • Total Disability
  • Partial Disability
  • Permanent Disability
  • Temporary Disability

If a person has an accidental disability, then he may have to face a lot of financial problems, because due to the disability, that person may not be able to do his work at all, or he may not be able to do any work at all. Very likely.

In such a situation, the source of income of that person becomes less or ends. Also, the cost of his treatment is also very high.

In such a situation, it is possible to be short of money to a great extent, so if you take Accidental Disability Rider then you can get relief from many problems.

Now maybe a question has come in your mind whether to take rider cover for accidental disability or buy a standalone policy?

Friends, if you take rider cover for accidental disability and accidental death, then many times it happens that the insurance company does not consider it as accidental.

In such a situation, you do not get the cover amount of your rider cover on time, as well as the cover amount of your term insurance is also not available.

That’s why I would like to tell you that it would be better if you take a personal accident policy for both these covers.

Almost every type of accident and disability is covered in a personal accident policy and you can also choose your cover amount according to it.

In such a situation, your family members will feel proud of you not considering you as a burden that you had taken such a right decision in time.

Friends, this was the 4th most commonly taken term insurance rider cover.

Let us now know about some more riders that you can take with your term insurance.

Income Benefit Rider

If you take the Income Benefit Rider and you die within the time limit of your term insurance cover, the insurance company pays your family a fixed amount every month in the form of installments.

With the help of this rider, a source of income can be made for your family expenses.

You will probably always be short, but you will get a source of income to meet the needs of your family. This rider can prove to be a great solution.

Accelerated Death Benefit Rider

Accelerated Death Benefit Rider comes in handy if you have some kind of incurable disease and there is probably 1 year or at most 2 years left in your life.

With the help of this rider, you get some amount of your death benefit cover, which can reduce your financial woes, can be used for your daily expenses as well as for your treatment.

This amount is subsequently deducted from the amount of your death benefit cover, and your family gets the remaining amount in case of your death.

Usually the premium for this rider is high.

Child Support Benefit Rider

Child Support Benefit Rider is another essential cover as it pays extra cover amount on the death of their parents to the children who opt for this rider as part of the term policy.

This guarantees that the child’s needs are taken care of, and they can pursue their education and dreams without financial worries.

If you want to take these covers as a policy, then remember that this policy is given to you by general insurance companies.

If you want to take these covers as a rider, then life insurance companies will give you these.

Waiver Of Premium Rider

As you have seen, you get two types of plans in Critical Illness Policy, Standalone Policy and Rider Plan.

You must take this rider because this rider helps you in two situations-

  • If you have any serious illness or
  • You may become disabled due to some kind of accident.
  • In both these cases, you get the convenience that you do not have to pay any further premiums. This will give relief to your family from financial crunch, so definitely take this rider.

Accidental Death Benefit Rider

If you die in an accident that is covered by your term insurance, then you get the benefit of the cover of the Accidental Death Benefit Rider.

For example-

Let’s say you died in a road accident and you have taken Term Insurance of Rs 1 crore along with Accidental Death Benefit Rider (Rs 30 lakh) cover.

In such a situation, your family gets a cover amount of ₹ 1 crore 30 lakh.

Your shortage cannot be removed with this money, but with a financial help, the burden of many types of responsibilities can be lightened.

Accidental Disability Rider

Accidental Disability Rider helps you if you become disabled due to an accident. Disability is divided into 4 categories-

  • Total Disability
  • Partial Disability
  • Permanent Disability
  • Temporary Disability

If a person has an accidental disability, then he may have to face a lot of financial problems, because due to the disability, that person may not be able to do his work at all, or he may not be able to do any work at all. Very likely.

In such a situation, the source of income of that person becomes less or ends. Also, the cost of his treatment is also very high.

In such a situation, it is possible to be short of money to a great extent, so if you take Accidental Disability Rider then you can get relief from many problems.

Now maybe a question has come in your mind whether to take rider cover for accidental disability or buy a standalone policy?

Friends, if you take rider cover for accidental disability and accidental death, then many times it happens that the insurance company does not consider it as accidental.

In such a situation, you do not get the cover amount of your rider cover on time, as well as the cover amount of your term insurance is also not available.

That’s why I would like to tell you that it would be better if you take a personal accident policy for both these covers.

Almost every type of accident and disability is covered in a personal accident policy and you can also choose your cover amount according to it.

In such a situation, your family members will feel proud of you not considering you as a burden that you had taken such a right decision in time.

Friends, this was the 4th most commonly taken term insurance rider cover.

Let us now know about some more riders that you can take with your term insurance.

Income Benefit Rider

If you take the Income Benefit Rider and you die within the time limit of your term insurance cover, the insurance company pays your family a fixed amount every month in the form of installments.

With the help of this rider, a source of income can be made for your family expenses.

You will probably always be short, but you will get a source of income to meet the needs of your family. This rider can prove to be a great solution.

Accelerated Death Benefit Rider

Accelerated Death Benefit Rider comes in handy if you have some kind of incurable disease and there is probably 1 year or at most 2 years left in your life.

With the help of this rider, you get some amount of your death benefit cover, which can reduce your financial woes, can be used for your daily expenses as well as for your treatment.

This amount is subsequently deducted from the amount of your death benefit cover, and your family gets the remaining amount in case of your death.

Usually the premium for this rider is high.

Child Support Benefit Rider

Child Support Benefit Rider is another essential cover as it pays extra cover amount on the death of their parents to the children who opt for this rider as part of the term policy.

This guarantees that the child’s needs are taken care of, and they can pursue their education and dreams without financial worries.

If you want to take these covers as a policy, then remember that this policy is given to you by general insurance companies.

If you want to take these covers as a rider, then life insurance companies will give you these.

Frequently Asked Questions

What is term insurance?

Term insurance is the purest form of life insurance. If you die during the term of the term insurance, your nominee gets a fixed sum assured.

In case of your death, your deficiency cannot be filled in any way, but with the term insurance done by you, the sum insured that your family gets after your death can meet many types of responsibilities.

Conclusion

Friends, this was all the information about Term Insurance Rider. If you have any other question in your mind, you can ask by commenting below.

If you got to learn something new from this article, then definitely share this article with your friends.

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