Nagpur City No 1 eNewspaper : Nagpur Today

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    Published On : Wed, Sep 23rd, 2020
    Featured | By Nagpur Today Nagpur News

    Difference Between a Term Plan With or Without Riders

    A term plan is the basic type of life insurance products. However, it is also extremely essential to invest in one to protect the financial needs of your loved ones in your absence.

     

    The best term plan in Indiatakes care of the family’s financial needs if the policyholder passes during the policy term. But not many investors know that they can also supplement their policy with a rider option to expand the coverage of their policy.

     

    Here, we will talk about the most popular riders that are offered with term policies. It will not only help you understand what is term insurancebutalso educate you about the options in case you want to add riders to your policy.

     

    But before you get into that, let us understand what a rider means.

     

    What is a rider?

     

    A rider is an add-on benefit that can be added to your term planto make it more comprehensive.

     

    While riders are usually taken in conjunction with a term plan, they can also be invested in as stand-alone policies. For example, critical illness can be taken as a rider or a stand-alone policy if allowed by an insurance company.

     

    Without a rider, term insurance will only provide the most rudimentary protection against an untimely demise of the policyholder during the policy term. But when you add these add-ons, you can personalize the insurance cover to help you get extended benefits across different scenarios.

     

    Different Types of Riders

     

    Here are a few common term plan riders available with the best term plan in India.

     

    • Accidental death: When you add this rider to your policy, the insurance provider will financially protect you against all kinds of accidents, such as road, industrial, etc., during the policy term.

     

    In case of an accident, the insurer will pay the policy nominee the sum assured for this rider. This benefit is over and above the policy amount that they are entitled to receive as the death benefit from the term policy.

     

    • Accidental disability: This rider assures you that if you become disabled following an accident, then you will receive the sum assured as pledged by the policy document. This sum can be received in a variety of ways, such as lumpsum amount or monthly income for a fixed period.

     

    • Critical illness: This is one of the most sought after rider options that peopletypically choose to supplement their term plan. Under the critical illness rider, if you are diagnosed with one of the illnesses mentioned in your policy, then you become entitled to receive the sum assured amount.

    Unlike health insurance plans that require you to be hospitalized to avail that benefit, critical illness rider does not have any such requirement. The amount is disbursed immediately so that you can use it to pay for your treatment and medical expenses.

    • Waiver of premium: This rider is available in case of disability and critical illness. In case of a disability waiver of premium, you would not be required to pay anymore premiums to keep your policy active in the future.

     

    Similarly, if you are diagnosed with a critical illness mentioned in the policy document, then you not only receive the sum assured benefit but also enjoy the waiver of premiums on your term policy.

     

    How to buy riders with a term plan?

     

    Term plan riders can be purchased at the time of buying the policy. It is now possible to use an online term plan premium calculator to compare policies and their benefits before making a purchase.

     

    When you select riders that you want to add to your policy, the applicable premium will be added to the total premium. Make sure that this amount is affordable and something you can pay till the end of the policy term.

     

    However, before you add these riders to your policy, you need to understand that once these add-on benefits are availed, they cannot be added to your base policy again. Therefore, it is worth the time to see if investing in an additional rider is worth the money or not.

     

    Rider options are immensely helpful in customizing your insurance policy to suit your personalneeds and lifestyle. They are available at affordable rates and come in handy when you need them.

     

    This is the reason it is recommended to add a rider to your term plan, even though it will make your policy slightly expensive. Don’t forget that in time of your need, it is these riders that get activated quickly and provide immediate financial relief.



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