If you want to know the term insurance rider definition, you firstly you will need to buy term insurance. The riders are additional plans that can be attached to your core life insurance plan to get added benefits in exchange for extra premiums.
- Riders for term insurance
The cost and benefits of the term insurance riders differ from insurer to insurer. So, it is important that you spend some time finding out about the riders that are available with your term insurance plan. Here are a few examples of the most popular riders:
- Accidental Death Benefit Rider
The policyholders can buy this rider with their original term plan in order to provide their nominees with an additional sum assured in case of a death caused by an accident. The sum assured is paid over the sum assured of the main plan. Some insurers offer this rider with an upper limit on the sum assured. The premium paid for the rider will be fixed during the tenure of the policy, but the cost of premium depends on the insurer.
- Accelerated Death Benefit Rider
Among the term insurance riders, this one is one of the most important ones. If the policyholder is suffering from a serious illness then the financial demands of hospitalization and medicines can be crippling to the family. However, if the insured has this rider then the insurer pays a certain percentage of the sum assured to the family to battle the treatment-related expenses.
- Accidental Disability Benefit Rider
Sometimes, the accidents may not kill a person but can cause permanent disability, which bars them from working and making money. This rider can help with the situation. If the policyholder is disabled by an accident then the insurer offers a portion of the sum assured as regular payments for five to ten years.
- Critical Illness Benefit Rider
This term insurance rider meaning is an additional benefit the policyholders receive in certain scenarios. In case of this particular rider, the insurer pays a lump sum to the insured if he or she is diagnosed with a critical illness. The most common critical illnesses included in the policy are cancer, strokes, heart attack, bypass surgery, paralysis, organ transplant, and kidney failure and more.
- Waiver of Premium Rider
If the policyholder fails to pay the premiums due to loss of employment or disability, the term insurance policy expires and the policyholder does not get any death benefits. However, if this rider is added to the policy, the insurer will waive off the remaining premiums without canceling the policy.
- Income Benefit Rider
Handling a lump sum to the beneficiaries can be tricky. Sometimes, upon receiving the death benefits from a term insurance policy, the nominees may find it challenging to manage the huge amount of money. If the policyholder has this rider then the nominees get yearly income benefits for a period of ten years along with the lump sum.
Enhancing a term plan with the riders is very important. However, it is necessary to study the riders closely before buying them to make sure that you have chosen an add-on that is suitable as per your requirements.