Are Add-Ons and Optional Features of Term Insurance Plan Really Beneficial?

A life insurance policy is designed to cover and lessen the risk of dying prematurely by providing a big lump sum payment to the family. Furthermore, these insurance provide a source of income for beneficiaries who are financially dependent on the policyholder. While a typical term insurance policy may not cover all types of dangers, the additional riders make it the ideal term plan for your protection.

It's also a good idea to account for a variety of different uncertainties and hazards that could cause the policyholder to require coverage. The following are some of the most popular types of riders in demand:

Different Types of Add-Ons in Life Insurance

Here is the list of different types of additional rider alternatives:

1. Accidental Death Benefits - If a policyholder dies in an accident while their policy is still valid, this rider pays the sum assured under death benefit to the deceased's beneficiaries in addition to the original cover.

2. Critical Illness Rider - If the policyholder contracts a serious illness during the policy period, this rider provides additional coverage. Heart attack, kidney or renal failure, organ transplants, artery bypass, and paralytic stroke are just a few of the common conditions covered by this rider.

3. Accident Disability Benefit Rider - If an accident leave the policyholder permanently handicapped, this rider allows the policyholder to make a claim on the term insurance policy. However, you should make sure you understand all of the provisions of this rider, including the temporary and permanent disability benefits, because different insurers have varying restrictions for these types of riders.

4. Income Benefit On Accidental Disability Rider - A policyholder's earning ability may be harmed if they are partially or fully handicapped as a result of an unforeseeable event. The policyholder receives monthly income security from the sum assured with this rider, and most major insurance companies normally provide regular monthly income to the policyholder as specified in their term insurance for a set length of time.

5. Waiver on Premium - This rider will come in handy if you become partially or completely disabled as a result of an unforeseeable accident. In this scenario, all future premiums for the base policy and the rider are waived until the death of the assured or the term of this rider, whichever comes first.

Advantages Of Getting Riders With Your Term Insurance Policy

There are numerous advantages to adding additional riders to term insurance, and you may choose which ones best suit your needs and those of your family. Simply said, riders are optional for any life insurance policy you purchase, but they are worth considering because they may be added for a small fee and provide you with so many additional term insurance benefits.

1. Complete Cover - If you consider adding riders to your term policy, you may not need to purchase a health insurance policy or any other sort of policy. It can provide you with comprehensive coverage against a variety of diseases, accidents, and other perks such as premium waivers.

2. Affordable - It's a terrific way to supplement your term insurance plan because these riders are frequently available at a low cost. While the separate, i.e., individual covers are more expensive to purchase, an additional rider in your term plan will allow you to have everything.

3. Flexibility - The policyholder can also personalise the riders to ensure that they are most suited to everyone's needs. However, you must keep in mind that the riders' policy tenure and sum assured cannot exceed the sum assured offered by your term insurance.

4. Tax Benefits - Another significant advantage that the best term plan can provide is the ability to save tax on your annual income. You can claim a tax deduction under section 80C of the Income Tax Act if your annual premium does not exceed 10% of the sum assured stated in your policy. This part allows you to save up to Rs. 1,50,000, which is a significant gain, especially for those in higher tax brackets.

Endnotes

You don't need to worry about obtaining full-fledged health insurance when you already have term insurance because there are so many excellent riders available at such low prices. However, before you buy, you should double-check all of the details of the additional riders, as well as everything that your policy will cover. You can even consult with your family to determine which riders best meet your present and future needs and then decide whether or not to add riders to your term insurance policy.

Also Read: 

Term Insurance Income Tax Benefit As Per Section 80C

Money Back Plan Vs Term Insurance

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.