Benefits of Adding Riders to Your Term Insurance Plan

Term insurance is widely recommended for securing the future of your family. You can buy yourself comprehensive life cover by paying an affordable premium and taking care of your family financially in case you pass away unexpectedly. However, a basic term plan does not mitigate other uncertainties. This is where riders come in.

Riders are additional benefits you can add to your term insurance policy to increase its coverage. While you may have to pay an extra charge for riders, the benefits you receive can be far greater. In this article, we will explain the key benefits of adding riders to your term plan and why they do matter.

Comprehensive Coverage

Riders help you increase your basic term plan’s coverage by addressing risks that are not covered in the basic policy. For instance, a Critical Illness Rider will allow you to claim a lump sum upon being diagnosed with critical illnesses like cancer, heart attack, or kidney failure. In such instances, having financial support for treatment or living costs can be invaluable.

Affordability and Convenience

One of the most significant benefits of adding riders is a cost-effective safeguard. Buying individual insurance for each risk can be expensive. Riders offer you a better alternative to covering the same risks at a lower cost in a single policy.

For example, an Accidental Death Benefit Rider gives an additional sum assured upon the policyholder’s accidental death. This rider is usually available at a small additional cost relative to the high-value coverage it provides.

Income Protection in Case of Disability

If you have an accident or illness that leaves you permanently disabled, this will likely impact your ability to work and earn. The Permanent Disability Rider ensures that in case of permanent disability, future premiums are waived, allowing you to maintain your term insurance policy without additional payments.

Waiver of Premium

The Waiver of Premium Rider is an often overlooked but crucial feature. If you cannot afford to pay premiums due to critical illness or disability, this rider ensures that your policy remains active without you needing to make further payments. In case of permanent disability, the insurance company waives all future premiums, keeping your term plan active even during difficult times.

Tax Benefits

As with a basic term insurance policy, the premiums you pay for riders are also eligible for tax benefits under Section 80C. Health-related riders, like the Critical Illness Rider, may also qualify for deductions under Section 80D of the Income Tax Act.

Conclusion

Riders can help customise your term insurance plan in such a way that it takes care of all your needs. Riders like Critical Illness, Accidental Death Benefit, Permanent Disability, and Waiver of Premium introduce a safety net that can be extremely helpful in unfortunate situations. Basic term insurance, when enhanced with the right riders, can be transformed into a comprehensive plan to protect yourself and secure your loved ones.