{"id":922,"date":"2015-12-27T11:17:48","date_gmt":"2015-12-27T05:47:48","guid":{"rendered":"http:\/\/trucompare.in\/blog\/?p=922"},"modified":"2016-02-01T16:57:54","modified_gmt":"2016-02-01T11:27:54","slug":"riders-on-term-insurance-plans","status":"publish","type":"post","link":"https:\/\/www.trucompare.in\/blog\/riders-on-term-insurance-plans\/","title":{"rendered":"Riders on Term Insurance Plans"},"content":{"rendered":"

Riders in Insurance<\/h2>\n

IRDAI defines<\/a> riders as \u201c add-on options (Benefits) that can be added to a basic Life Insurance Policy – to provide additional coverage\u201d.\u00a0 Riders can help to customize your insurance policy based on your personal needs and coverage requirement. You can take riders at the time of taking the basic policy, however, some insurance companies allow to opt for them during the tenure of the policy. Riders come with a cost, so they increase the total premium to be paid on the policy. Some riders are in-built in the base policy, while others are offered as stand-alone from the base policy.<\/p>\n

The premium paid on riders is added to the base premium of the policy and, thereby, it becomes eligible for deduction under section 80C.<\/p>\n

There are several riders available on all types of insurance policies. Here, we will discuss the ones that are available on a term insurance plan and recommend which one should you take.<\/p>\n

Term Insurance Riders<\/h2>\n

Term insurance is the purest form of insurance. That is, there is only death benefit \u2013 if the policyholder dies, the sum assured is given to the nominee. There are no maturity or survival benefits in terms of returns or bonus. When a term is bought with rider(s), the nominee gets an extra sum over and above the sum assured in case of policyholder\u2019s death.<\/p>\n

Let\u2019s understand which riders a policyholder can opt with the a term insurance policy. A detailed know-how of these riders would help you to take a wise decision.<\/p>\n

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  1. \n

    Accidental Death Benefit (ADB)<\/strong><\/h3>\n<\/li>\n<\/ol>\n

    Under this rider, if the life insured dies in an accident, the nominee will get an additional amount, apart from the sum assured. Now, most term insurance buyers often think unless they take this rider, the nominee will not get the sum assured in the eventuality of policyholder\u2019s death due to accident. Well, the fact is that term insurance covers accidental death, whether this rider is taken or not.<\/p>\n

    Here is an example. Shlok purchased a term insurance policy of Rs30 lakhs. His friend Ashok purchased the same policy for the same amount, but with an ADB rider of Rs10 lakhs. Now, in the unfortunate event of their death in a road accident, Shlok\u2019s nominee will get only Rs30 lakhs while Ashok\u2019s nominee will get Rs40 lakhs (Rs30 lakhs sum assured + Rs10 lakhs ADB amount).<\/p>\n

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    1. \n

      Critical Illness Benefit (CIB)<\/strong><\/h3>\n<\/li>\n<\/ol>\n

      This rider gives an additional amount (usually equal to sum assured) in case the life insured is diagnosed with a critical illness as specified in the policy document. Generally, most insurance companies cover cancer, heart attack, kidney failure, stroke, major organ failure, paralysis and Coronary\u00a0Artery\u00a0Bypass\u00a0Graft Surgery (CABG), among a few others scope of critical illnesses.<\/p>\n

      CIB can be taken as a standalone rider or as an accelerated rider. In standalone CIB rider, when the life insured is diagnosed with a disease mentioned in the document, then a lump sum amount is paid to the life insured and the policy continues with the base sum assured or lesser coverage amount. In an accelerated CIB rider, the death benefit (even if the life insured is alive) is paid and the policy is terminated. So, when you are taking a CIB on your term policy, do ensure that you know whether you are opting for a standalone or an accelerated rider.<\/p>\n

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      1. \n

        Disability Income Benefit (DIB)<\/strong><\/h3>\n<\/li>\n<\/ol>\n

        The basic premise of term insurance plan is based on the fact that the sum assured is paid if and only the life insured dies. However, if a DIB rider is taken, the life insured will get a regular income from his policy in case he becomes disabled. Hence, this rider is also known as Partial and Permanent Disability rider.<\/p>\n

        This rider assumes that the life insured is no longer in physical capacity to earn due to disability which can be partial or total. The policyholder a fixed percentage of the sum assured at regular intervals for a fixed period of time to replace the loss of his income. Depending on the severity of disability, the policyholder may also get full sum assured as lumpsum and the policy will get terminated.<\/p>\n

        The definition of disability varies from one company to another. Please ensure you understand the definition before taking this rider.<\/p>\n

        Many insurance companies club this rider with ADB rider, so do your research properly.<\/p>\n

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        1. \n

          Waiver of Premium (WOP)<\/strong><\/h3>\n<\/li>\n<\/ol>\n

          If the life insured is diagnosed with a critical illness or becomes disabled, he might be in a position to pay future premiums as his regular income will cease to generate. The insurance company will waive of the payment of future premiums without changing the sum assured and other features of the policy. So, not only there is a waiver of premium during the survival of the life insured, there will be also death benefit for the nominee in case of life insured\u2019s death.<\/p>\n

          We compared the riders offered on term plans by 14 life insurance companies. Surprisingly, only 7 insurance companies offer riders. Let\u2019s take a look. <\/strong><\/p>\n

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          1. Aegon Religare iTerm<\/a><\/li>\n<\/ol>\n

            The term plan from Aegon Religare offers four riders:<\/p>\n