Term insurance plans are essentially conducive to the interests of the conventional investor, thanks to their inherent affordability and low-risk nature. While term insurance plans already provide comprehensive coverage, it also provides additional ridersto enhance the coverage of the policy. In short, it can be said that insurance coverage is virtually incomplete without the inclusion of important and basic riders.
Simply put, it can be said that the inclusion of riders chiefly ensures covering the more fundamental aspects of life contingencies. The basic term insurance plans likeICICI term insurance plans, LIC term insurance plans, Aegon Life Term insurance plans, etc. might not cover all the important aspects. Thus,it is vital to comprehend the significance of additional riders.
Before addressing the importance of riders, it is important to understand its inclusion and exclusion. Fundamentally speaking, term insurance policies like Aviva term insurance plan, LIC term insurance plans, Bajaj Term plans, etc. be it popular or otherwise, areprimarily meant to provide financial protection to the family of the insured in case of any eventuality. Put simply, any such scheme works as an income replacement tool upon the untimely death of the concerned policyholder.
However, what about equally significant contingencies that are not covered under the cardinal scheme? Such unforeseen crises as permanent disability, accidental death and the like cannot be addressed by the limited provisions of the base insurance scheme. It is then that one needs the help of riders.
Benefits of Riders
The following are some of the most common riders available alongside a majority of term insurance plans.
Accidental Death Benefit Rider
- Should the concerned policyholder die by accident, the death benefit rider is paid to the concerned nominee, in addition to the base death benefit as mandated by the norm.
- The amount of the sum assured under the death benefit riser varies from one company to another. The policyholder is always advised to imbibe the terms and conditions of the insurance policy.
- It is crucial to keep in mind that the accidental death benefit rider is strictly not applicable to cases where the death of the policyholder has not been caused by accident.
Critical Illness Rider
- Meant for furnishing the policyholder with additional coverage for critical disorders, the critical illness ailment is the most significant rider.
- As experts maintain, it is better to secure the claim illness rider instead of going for a separate health insurance scheme altogether. As it is, in that case, the policyholder may find difficult the process of claim settlement. Apart from that, the premiums might also increase.
- However, it is most significant to go through the diseases covered under the rider scheme before deciding to buy it.
Term Assurance Rider
- As the name suggests, the term assurance rider is almost similar to the base term insurance plan, except that it furnishes the policyholder with the advantages of a rider.
- Generally speaking, most insurance companies offer lump-sum payouts. What is more, the convenience of this rider lies in the fact that it has a comfortably low-risk profile.
- While it remains relatively obscure, the term assurance rider is none the less among the most substantial riders offered by term insurance plans.
Guaranteed Insurability Rider
- As the name suggests, the insurability rider is chiefly meant to cater to the altered life insurance requisites with age.
- Put simply, life insurance demands naturally change over the course of time. As one age, one undeniably needs to adhere to a different set of insurance policies.
- As a result, the guaranteed insurability rider is meant to provide the concerned policyholder with different insurance options in accordance with his or her age needs.
- Apart from being able to purchase other policies congruent with the dynamics of age, the bigger benefit of the insurability rider is that it does not necessarily mandate any additional medical examination.
Income Benefit
- The chief purpose of the income benefit is to help the policyholder address the financial contingencies in the course of an accidental disability.
- Generally, the amount of the rider is provided in the form of regular monthly remuneration which is one percent of the basic sum assured for a period of ten years.
- This income benefit is primarily meant for addressing contingent disability crises. There are income benefits on other contingencies as well.
Waiver of Premium
- Waiver of premium rider is one of the most vital riders under any insurance scheme. As the name hints, upon the course of critical contingencies, the future premiums both under the rider and the basic sum assured will be substantially waived off till the end of the term or the death of the concerned insured.
- The waiver of premium rider is especially beneficial in addressing the likes of critical illness contingencies. Critical illness for women is also covered by the waiver of premium rider.
Conclusion
As mentioned at the outset, the chief purpose of any insurance schemeis to act as a substantial income replacement upon the early death of the concerned policyholder. It is the essential aim of insurance holders to prepare for mortal contingencies. However, in the course of preparing for such, the more immediate needs might get overlooked.
Riders come at this point. Essentially, the importance of riders is to address the more immediate contingencies such as the likes of disability and critical disorders. Immediate or not, contingencies are still contingencies. So it is vital to comprehend the significance of riders alongside that of the base insurance plan.
While it is certainly true that additional premiums are required to avail of the complete benefits of the riders, they are undeniably worth it. What is more, the premium issue is pretty conveniently addressed by the likes of such riders as the premium waiver rider. However, it is generally recommended to thoroughly read up the terms and conditions before committing to the inclusions.
All said and done, riders are important. It may be said they tend to act as meat on the largely skeletal base insurance plan which is certainly incapacitated to cater to all the financial needs.
