Insurance policies are of different types in India. One such type that is very popular is the term insurance policy. This type of insurance policy is a protection plan that is essential for every family. Term insurance protects your family and loved ones by providing financial security.
Under term insurance comes to a word called a rider. Read through the article to know term rider meaning and its benefits.
What is the Rider in Term Insurance?
The rider is generally termed as add-ons that can be taken –out by the insured person. A rider is also termed as an additional benefit that comes along with traditional term insurance. The benefits provided by the ride of term insurance are based on certain conditions. It can also be seen as the best way to customize your term insurance policy to suffice your needs.
In simple words, insurance rider can be described as an add-on to primary policy. It offers additional benefits to the insured person. Now we know term rider meaning, let’s see its types.
What are the Different Types of Term Insurance Riders?
The most common types of insurance rider are as follows:
Accidental Death Rider
The first type of rider in insurance is an accidental death rider. Usually, a general term insurance policy gives benefits in the form of paying sum assured in case of death. But with the add-on in the form of an accidental death rider gives additional safety. It offers financial independence to your loved ones after the death of the insured in an accident.
Premium Waiver Rider
The other type of rider in insurance is the premium waiver rider. Usually, any insurance policy lapses when the premium is not paid. But getting an add-on like premium waiver gives you an edge. In case a policyholder gets injured or disabled for a sustained period, all future premium payment is waived –off.
Critical – Illness Rider
The most significant of three riders is critical illness add-on. Including this rider along with base coverage under term insurance is very advantageous. When the policyholder suffers from a critical illness like the insurance company pays critical –illness sum. The diseases suffering by the policyholder must be listed in the insurance rider. The critical illness can be heart-attack, cancer, kidney failure, paralysis etc.
What are the Benefits of Getting a Term Insurance Rider?
The first thing that we need to understand about riders is that they offer extra coverage. A rider offers additional coverage without buying a new policy. The important benefits of term insurance riders are listed below. Let’s consider different types of rider in insurance and their benefits together.
- Accidental death rider benefit: The first important advantage of the accidental rider is that it pays an additional sum in case of death. It means during the policy term if the insured dies due to an accident, the extra sum is paid to the family. The cost of the accidental rider in insurance is not expensive. It varies from company to company.
- Premium waiver rider benefit: This rider offers you the most beneficial among all other riders. The premium waiver rider allows the policyholder to stop paying the premium of the insurance policy. Suppose the insured person meets with an accident or suffers from disability his income is cut. In such cases, it becomes difficult to pay the insurance premium. But with this rider, he or she need not worry. This rider will waive- off the premium of the term insurance policy.
- Critical illness rider benefit: With the rise in allergies, the chance of a person catching diseases is more. The cost of treating critical illness is very expensive. In such a situation having a rider is very beneficial. In the presence of a critical illness rider, the insurance company provides a sum for compensating the loss of income.
Also Read: 5 Insurance Policies you Must have in 2020
General Benefits of Riders in a Term Insurance Policy
- Cost of riders is cheap than new policy: the cost of buying a rider is cheaper than buying a new policy. Also, there are a number of riders available for each type that suits requirements of insured. These riders can be added to customize the insurance policy to fulfil their needs.
- Riders are available for all types of policies: As mentioned previously, riders are add-ons available for different types of policies. They can be bought with terms, UILP, endowments, life etc.
- They can be used to avail tax benefits: similar to the base insurance policy rider also offer tax benefits. The rider can be used along with a base policy to claim tax benefits.
Riders of the insurance policy are simple add-ons that are provided by the insurance companies. The policyholder can attach riders to any insurance policy. The riders make insurance policy more suitable to the family needs of the insured.