How to Customise your Term Insurance Plan with Riders

A term insurance policy is a must-have if you want to provide financial security to your dependents without paying a high premium for the risk cover. Since these policies do not acquire a cash value, they are typically offered at a lower premium. While term insurance policies provide a comprehensive life cover, you can also choose to enhance your policy with riders. Listed below are certain riders that are most commonly offered by life insurance firms. 1. Waiver of Premium Rider: If you have this rider, you will not be required to pay any future premiums towards your base policy in case you happen to meet with an accident or illness that is defined in the rider brochure. 2. Accidental Death Benefit Rider: This rider provides the nominee an additional sum assured, over and above the base policy’s sum assured, in case the policyholder meets with an accident that causes death. 3. Critical Illness Rider: Most critical illness riders provide a lump sum payout upon diagnosis of an illness that is specified in the policy brochure. This payout can help pay for hospitalisation expenses and can even serve as an income replacement. Thus, if an illness runs in your family, it is advisable to purchase a critical illness rider along with your base policy. 4. Accidental Disability Benefit Rider: This rider will provide payouts to the policyholder in the form of instalments over a period of years if the conce ed individual happens to suffer from disability due to an accident. The benefit payable may also vary based on the nature and severity of the disability. 5. Term Rider: If you want to enhance the payout that will be offered to your nominee in case of an unfortunate eventuality, it is advisable to purchase a term rider. A term rider will, thus, provide an additional sum assured to the nominee in case of the policyholder’s death. Things to Rememberr Riders can be attached to the base policy in a simple and hassle-free manner. However, make sure to keep the following points in mind when purchasing a rider from your insurer. Riders are offered at a nominal cost by insurance providers. Thus, you can purchase a rider and attach it to your base policy without a significant rise in premium. In most cases, the sum assured and the tenure of the rider that you choose cannot exceed the sum assured and tenure of the base policy. Most insurance providers do not offer riders to individuals over the age of 65 years. Certain insurers will only allow policy buyers to purchase riders at the time of purchasing the policy. In such cases, you cannot opt for a rider during the policy tenure or during policy anniversaries. Thus, when purchasing a policy, make sure to ask the insurer if they have any restrictions with regard to purchasing the rider during the policy tenure. When you purchase a rider, you also become eligible to claim tax benefits under Sectio 80C of the Income Tax Act, provided that it doesn’t exceed the overall tax limit. Also, if you purchase a health-related rider, you can also claim tax benefits under Sectio 80D for premiums paid. It is important to remember that the number and types of riders offered will usually vary from plan to plan and insurer to insurer. Thus, make sure to assess your coverage needs and opt for necessary riders accordingly.