Are the Add-ons and Optional Features of Term Insurance Plans Actually Beneficial?
A life insurance policy is ideally created to cover and mitigate the risk of dying early by leaving a large lump sum to take care of the family. In addition, these policies act as an income replacement tool for the beneficiaries who were dependent on the policyholder financially. While a traditional term insurance policy may not help you cover all types of risks, it is the additional riders that make it the best term plan you can buy for your safety.
It also makes sense to factor in various other uncertainties and risks that might drive the policyholder to need a cover. Here are some of the most common types of different riders that are sought after:
Accidental Death Benefit Rider
If the policyholder meets with an unfortunate death due to an accident, while their policy is still active, then this rider offers the sum assured under death benefit in addition to what is offered as the original cover, to the beneficiaries of the deceased.
Critical Illness Rider
This rider provides additional coverage to the policyholder if they contract a critical illness during the policy term. Some of the common illnesses covered by this rider are heart attack, kidney or renal failure, organ transplants, artery bypass and paralytic stroke, to name a few.
Accident Disability Benefit Rider
While accidents are untimely and may not always leave the policyholder completely disabled, this rider provides a claim on the term insurance policy even in the case of disability. However, be sure to understand the full details of this rider, its temporary and permanent disability benefits as different insurers have different clauses for this type of riders.
Income Benefit On Accidental Disability Rider
When a policyholder is partially or completely disabled because of an unforeseen accident, it might also hamper their earning capacity. With this rider, the policyholder gets monthly income security from the sum assured, and typically, most of the major insurance houses offer regular monthly income to the policyholder as mentioned in their term insurance for a stipulated period.
Premium Waiver Rider
If you face a partial or complete disablement in an unforeseen accident, then this rider is just the saving grace you would need. All future premiums, in this scenario, are waived off for basic policy and the rider itself, till the death of the assured or term of this rider, whichever is earlier.
You can discuss with your family to know which of the riders suit your current and future needs the most and then decide to add riders to your term insurance.
Advantages Of Getting Riders Added To Your Term Policy
There are many benefits of choosing additional riders in a term policy, and you can decide which ones would suit your needs and your family’s requirements the best. Simply put, riders are optional for any life insurance policy you buy but worth considering as they can be added for nominal value and will offer you a lot of added term insurance benefits.
Complete cover
You may no longer need to opt for a health insurance policy or any other type of policy if you consider adding riders to your term policy itself. It can pretty much offer you a holistic cover against various diseases, accidents, and many other benefits like waiver of premiums.
Affordable
It is a great add-on to your term insurance plan as these riders can often be added at very affordable costs. While the separate, i.e., individual covers might be way costlier to buy, an additional rider in your term plan will make it possible for you to have it all.
Flexibility
It is also possible for the policyholder to customise the riders and ensure that they are best suited to everyone’s needs. However, one must keep in mind that the policy tenure and sum assured of the riders cannot be more than the sum assured your term insurance is offering.
Another major benefit that the best term plan can offer you is the benefit of saving tax on your yearly income. Provided your yearly premium does not cross 10% of the sum assured mentioned in your policy, you can claim it as a tax deduction under section 80C of the Income Tax Act. You are allowed to save up to Rs. 1,50,000 under this section, and that is a huge benefit, especially for people who fall under higher tax brackets.
With so many amazing riders up for grab, at very nominal prices, you no longer need to worry about buying full-fledged health insurance when you already have term insurance. However, be sure to check all the details of the additional riders and everything that your policy will cover before you go ahead and make the purchase.
Source:
https://www.incometaxindia.gov.in/pages/acts/income-tax-act.aspx
