With the uncertainties of getting diagnosed with a major disease or ending up in an accident, you need to have some financial backup for situations like these. But why not rely on your life insurance policy for such potential risks? This is because your insurance policy gives you basic coverage and does not cover everything. This is where a rider comes into the picture to secure you from those unfortunate events. Here are five common term insurance riders that you can combine with your plan.
A rider is an additional component of coverage that you can add to your base plan to enhance the protection against certain events. The coverage and benefits obtained from the riders go beyond the perks of an insurance plan. By contributing some extra towards the premium, you can buy whichever rider you want that applies to your term plan. Options like critical illness rider, accidental death rider, a permanent disability rider, and many such make you eligible for a lump sum or regular payout. Let’s see the various rider benefits in detail:
Most major illnesses are usually not included in the term plans and hence, adding such a rider, covers you against critical illnesses. Kotak Life Insurance gives you protection from thirty-seven major ailments including cancer, paralysis of limbs, blindness, and brain tumor. If you were to get these illnesses, you would be eligible for a lump sum payout on the diagnosis. Also, these riders provide tax exemptions under section 80C and 10(10D) of the Income Tax Act, 1961.
Waiver of premium is a rider that gives you the perks of having an active term insurance plan even if you failed to pay the premiums due to financial constraints. The effect of this rider could thereby redeem the insurance policy from lapsing completely. Such a benefit aids you during the loss of income or temporary loss of a job.
Many life insurance policies provide coverage in case of accidental death but opting for a rider would reduce the financial burden on the family. Due to the lump sum payout, your family will be able to live independently and pay off any of your debts.
In case you were to lose your job, it would be a major financial crisis even if you weren’t married. During such a situation, you would not be able to pay your premiums due to a lack of resources. In order to avert such a scenario, the income benefit rider provides a fixed income for a specified period of time which is over and above the sum assured of your policy.
This rider makes you eligible to receive a sum assured over a period of time in case of an accident causing permanent disability. The rider benefit received can be used to replace the regular income and also pay for the indirect expenses of the family. As the payout is regular, it can ultimately take the place of your monthly salary and make sure that your family is not affected financially.