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Are Add-ons and Optional Features of Term Insurance Plans really beneficial?

Janhavi Shinde Janhavi Shinde 31 October 2017
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You might be juggling whether to opt for add-ons and optional features or to go for a basic insurance plan! Go through this 6 minutes read to get a crystal clear view about your confusion.

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You prefer to seek an expert advice or research before buying a term insurance plan. Obviously, because you don’t want to goof-up while choosing the perfect plan. The best you can do is compare different term insurance plans online to get better quotes and zero down on the best possible plan finally.

Buying term insurance is one thing. But, what about the additional riders?

Yes, I am talking about the paid features that every insurance company offers with an extra premium, of course!

But, are these add-ons or the optional features really important?

What if you simply buy riders for the heck of it, but then realize it was a sheer waste of money?

Tsk tsk… Too many questions!

Let’s, debunk these queries and find out if the paid features are really worth the bucks.

Term Insurance Well Explained..

Term Insurance plans are no-frill insurance plans that offer you coverage for a certain or ‘defined’ term of years. In short, term insurance promises to pay your nominee/ nominees a lump-sum amount in case any contingency occurs during the policy period.

Doesn’t it sound promising?

It certainly does, right?

Term plans offer a higher amount of sum assured at a very nominal premium.

But, what if you outlive the policy period? Will you be still eligible to get some money at least?

Sadly, there are no maturity benefits that a term insurance plan can offer except a term insurance plan with a return of premium option.

Life cover is the only main objective that a term insurance plan can offer. Because these are pure protection plans. All you need to do is keep paying the term insurance premiums regularly for the duration chosen and in return the insurer pays the sum assured to your family members in case something unfortunate happens to you.

Your nominees can utilize these funds for household expenses, children’s education, and retirement as well as paying off any unpaid debts.

Now, Let’s Talk About The Riders..

Riders or add-ons are the paid features that enhance the scope of coverage of your base term insurance policy.

Don’t forget, you shell out extra bucks (than what you normally pay), for these paid features known as add-ons or riders.

But again, are these so-called riders worth the money you spend? Do they actually offer extra coverage in all sense?

Well, let me tell you that this all depends on the insurance company and the type of add-on you opt for.

Let’s explain it one by one:

1. Accidental Death Benefit Rider

Accidental death benefit rider is an add-on that will pay your nominee the additional sum assured in case you suffer an accidental death.

Usually, a time frame of 180 days from the date of the accident is considered to pay off the rider benefit.

Because not always an accident can lead to death immediately.

But, buying an accidental death benefit rider won’t really make sense in the below cases:

  • If you aren’t a road traveler or someone who doesn’t commute frequently by car, bike, train, commercial vehicles or public transport.

  • If you don’t travel by air frequently for business, leisure or travel purposes

  • If you aren’t an employee who works on-site engaged in hard-core civil work or in a manufacturing industry.

Therefore, do not make a haste of opting for the accidental death benefit rider if you do not fall in the above-mentioned category.

2. Critical Illness Rider

Critical illnesses have become too common these days. A person who is 30 years old can also suffer a cardiac arrest. Besides, many people do fall prey for critical illnesses like stroke, cancer and kidney diseases.

Though one may not leave the world immediately after getting diagnosed with such deadly diseases, this may certainly leave them handicapped financially.

Loss of income due to incapability to work may dig a big hole in the bread-winner’s as well as his family member’s lives.

This is when a critical illness rider comes to your rescue. The rider pays offs funds to take care of your medical expenses. While certain insurers will compensate you with 100% of the rider sum assured on the diagnosis of the critical illness, if you survive 30 days from the date of the diagnosis.

But, buying a critical illness rider won’t really make sense in the below cases:

  • If you lead a healthy lifestyle and are not addicted to things like smoking, drinking alcohol or consuming narcotic substances etc.

  • If you have a workplace that doesn’t build or increase stress-levels

Therefore, do not blindly opt for a critical illness rider unless really required.

3. Accelerated Death Benefit Rider

Accelerated death benefit rider offers financial aid in case you get diagnosed with terminal illnesses. These illnesses may include, Leukemia, AIDS, Cancer, Ebola, etc.

Definitely, these illnesses wipe off your bank account if you fall prey to such deadly diseases. An accelerated death benefit rider comes to your rescue and pays the compensation while you are alive.

Medical expenses are too high to get any terminal illness treated. Which is why accelerated death benefit rider offers you a financial aid by offering part of the sum assured well in advance to take care of your living or medical expenses.

But again, not necessary you must buy an accelerated death benefit rider. You may avoid buying in the below scenarios:

  • If you do not have a family history of terminal illness

  • If you stay in a locality which is clean and probably in a good environment

Besides, don’t forget that your insurance company pays out a part of your sum assured in advance to take care of your medical expenses. Which means, your nominee will be deemed to get only the remaining amount if anything unfortunate happens to you.

Therefore, self-analyze before opting for the accelerated death benefit rider. Trust us, you may repent buying this rider if you miss out to do a self-analysis!

So, Should You Opt For These Add-Ons or Not?

Well, I am sure you must have got a gist of how the term insurance riders work and when it makes sense to buy them. Investing in the paid features offered by your insurer may definitely enhance your plain vanilla term plan. But, at the same time, these riders do cost money.

Don’t give a second thought to buy a rider that suits your requirement if you think it is utterly important to buy. But at the same time, do research, compare, read the policy wordings carefully and self-analyze your personal requirement to sigh a breath of relief to save yourself from a difficult predicament.

Nonetheless, don’t hesitate to contact to get an expert advice. We will help you buy a term insurance plan tailor-made as per your requirement. Right from top-notch post-sales services to effective claims management through our Nominee Assistance Program, we do it all for you!

Recommended Read: The All-In-One Guide for Term Insurance Riders

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Janhavi Shinde
Written by Janhavi Shinde
Right from being a Flight Attendant to a Banker and now to a Content Writer, she has tasted success in all the fields. The kinda girl who loves pets and knows how to manage difficult people and events.