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How to Choose Riders Effectively for your Term Insurance

Inderpal Ahluwalia 21 December 2017
4.5 (13 votes)

Choosing the right rider is as important as choosing the term insurance plan itself. You want it to work to your advantage. Read on and get some crisp tips on choosing effective riders!

Rider in Term Insurance

Riders are like accessories which can be attached to the main product to enhance its value and functionality. An accessory like winter gloves will be of great use for a place like Kashmir but they won’t serve the purpose if you live in Mumbai. Same happens in case of insurance riders as well. You need to choose the right rider that will help make your plan more effective for an extra premium payment that you are paying for it.

Riders are normally additional protection that you can add to your base term insurance plan. The coverage of a term insurance rider comes into play on an occurrence of the specific event and provides the benefit over and above the basic plan.

If your family has a history of critical illness, then a critical illness rider is a must for you.

Critical illness rider helps cover the cost of critical illness on diagnosis. It provides you with lump sum benefit so you don’t have to spend your savings on the expensive treatment. This is a very important rider as critical illness can be an exclusion in health insurance as well. If unfortunately critical illness results in the death of the policy holder then term insurance plan benefit will be paid to the nominee.

“Waiver of Premium” rider keeps your term plan active even when you can’t pay premium due to some circumstances.

Insurers provide you with financial protection in case of unfortunate incidents or situations. For this financial security, you have to pay the insurance company a fee which is called premium. The premium amount is calculated depending on the type of plan, coverage, the term of plan etc. You pay this amount out of your income and taking money out of your monthly budget. What if you lose your income due to a certain unexpected situation like disability due to an accident or critical illness and are not able to pay the term insurance plan premium to keep it active. This is when the waiver of premium rider becomes active and take the financial burden of paying premium off your shoulders for a while ensuring your term insurance plan is still active.

“Accidental Death” rider meets expenses arising out of unexpected accidents which can be devastating for the family.

Accidental deaths mostly happen in no time which leaves the family and dependents devastated. It shocks the family and it is a difficult time to handle the situation for the spouse and children. This can lead to the rise of other emergencies in the family like hospitalisation of family member due to shocking news. Whatever the emergency may be it requires financial help. To cover for such circumstances, accidental death rider gives additional sum on top of the base sum assured. The rider is very useful for people working in dangerous conditions as it provides the extra financial help especially when your family needs it the most.

If you are the sole bread winner of the family, then “Income benefit” rider will support your family with regular income.

If someone is sole bread winner of the family and something happens to them then it becomes very difficult for the family to replace that income. Income benefit rider will help the dependent family with a regular income for a fixed number of years. This financial cushion will support the family to have a smooth transition to another source of income without creating a panic of sudden loss of income from the breadwinner.

It is not possible to know what will happen in future but depending upon individual needs one can customize insurance cover with the help of a term insurance rider. Choosing the appropriate rider can give you additional benefits and make your cover more effective for a nominal extra premium. So, if you already have a term plan you can add the riders to it or if you are buying a new plan you can get the plan with the riders attached. Riders can jazz up your term insurance plan like accessories do to your attire. So don’t wait anymore, know the riders you want to attach to your term insurance plan and get the advantage by enhancing its coverage.

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4.5 (13 votes)