The financial needs of your family can change based on specific life stages. Whether you are a bachelorette or a married individual, your financial and insurance needs might not be consistent. Therefore, to protect each stage of your life, you might purchase an online term insurance plan for your family members. Term insurance plans can be termed as protection plans, which look after the financial well-being of your family in your absence.
Although term plans offer substantial coverage at a low cost, you might be confused about how much coverage to buy to protect your family financially. Since you might fear the uncertainties of life, you might purchase an extremely high coverage without analysing your family requirements for circumstances like critical illness, accidental death, and so forth. For such a scenario, you should avail riders that can strengthen your core term policy.
Before purchasing rider, let’s begin by understanding what is term insurance plan in detail.
A rider can be an additional attachment to your base term policy. With riders, you can enhance your base policy to receive financial protection in times of difficult situations. For instance, if you are unable to pay your premium due to the financial crisis, you can avail ‘waiver of premium’ rider. When you buy a waiver of premium riders, your insurer can waive off the premium for a specific duration.
Many insurers might provide several riders on top of your term plan. Therefore, let’s first understand each type of rider and then make a selection accordingly based on your requirements:
- Physical disability rider
Any type of disability, whether it is permanent or temporary, caused due to an accident, can be covered under a physical disability cover. If you suffer from a physical disability, your insurer can pay you an amount regularly for the next 5-10 years, which can be a specific proportion of your sum assured. For instance, your insurance company may offer 10% of your sum assured amount. Since a physical disability rider comes into force after an accident, you can purchase it with an accidental death rider.
- Accidental death rider
Under an accidental death rider, your insurer can provide your family with an additional sum assured value in case you die due to an accident. However, if you don’t purchase an accidental death rider, your family members are still eligible to receive the term insurance benefits. The primary objective of an accidental death rider is to provide financial aid to your loved ones only if there is a death due to an accident within the family.
- Waiver of premium rider
There might be times when you might fail to pay the premiums due to loss of income or physical disability. During such a scenario, you can avail a waiver of premium rider. Under a waiver of premium rider, your future premiums can be waived off, while your policy can be into force at the same time. If you don’t purchase a waiver of premium rider when you are unable to pay the premium permanently, your term policy would be terminated.
- Critical illness rider
During critical illnesses, your hospitals can charge you with a hefty amount for medical treatments. If you are diagnosed with severe disease, you can purchase a critical illness rider to receive financial support during medical emergencies. A critical illness rider can provide you with a lump-sum amount after the diagnosis of the critical illness. Usually, the number of diseases covered are mentioned in the policy document; therefore, go through the terms and conditions carefully.
- Income benefit rider
As the name suggests, an income benefit rider acts as an income replacement after your demise. When your family members avail an income benefit rider in your absence, they can receive a supplementary amount as income for the next 5-10 years. In addition to this, your insurer can provide a sum assured amount to safeguard their financial needs.
To sum up, riders can be an essential element of your term policy since it covers your loved ones from unannounced eventualities of life. However, these riders are availed at an additional cost. Therefore, you should invest in those riders, which can be necessary for you and your family in the long run.