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

There are two different perspectives regarding whether one should add riders to his/her term plan. First is, riders make term plans complex and hence, disadvantageous. The second is, they make term insurance more comprehensive. And therefore, adding them to your term life insurance policy is beneficial. 

Here, we will look at the advantages and disadvantages of having add ons for term life insurance. This will help you assess whether it is necessary to have riders with your term life insurance policy.

Advantages Of Having Add-ons With Your Term Life Insurance Policy

Here are few Advantages of having add ons in your term insurance plan: 

• In The Time Of Need, Add-ons Can Be Beneficial 

A term plan is a pure life cover. A basic one takes care of the financial needs of a policyholder’s family if he or she dies during the policy tenure. Now in case, a policyholder meets with an accident and becomes permanently disabled then having riders like accidental disability and waiver of premium on disability can be a blessing in disguise. In such a scenario, the policyholder will receive the sum assured for the accidental disability rider. He could use this money for treatment or any other purpose. Meanwhile, having the waiver of premium on disability riders means he wouldn’t have to pay the policy premium anymore. But the policy would remain active till the end of the term and the sum assured would remain the same. 

• Some Add Ons Are Cheaper Than Stand-alone Policies

Insurance for accidental death and critical illness are available as stand-alone policies as well as riders, but the riders come cheaper. Let’s take the example of a critical illness rider to understand this one better.  If you take a critical illness cover for Rs 5 lakh as a standalone plan at 30 years of age, you will have to pay about Rs 8,400 per year for the policy. Meanwhile, if you take a Rs 5 lakh cover as an add on with term life insurance, you will have to pay only Rs 4,200 per year for the add on cover. 

• No Separate Document/Medical Checkup Is Needed For An Add-on

When you buy a rider with a term insurance policy, you do not have to sign extra documents for the rider. All you have to do is, declare what riders you want to add with your term life insurance plan, and accordingly, your premium amount will be decided. If you are buying riders for things like critical illness or waiver of premium for a critical illness, you do not have to go through a separate medical check-up. 

• Some Riders Are Not Available As Stand-alone Policies

Accidental disability rider is not available as stand-alone policies. Hence, if you want to avail them you have to buy them as an add on with the term insurance policy. Meanwhile, the waiver of premium riders comes exclusively to your term life insurance policy. There is no need for a plan like this if you do not have a term plan.

Conclusion

The premium for the riders depends on the basic sum assured. And of course, some riders come at a cheap price and some are expensive. But while buying a term life insurance look for the riders that will make your plan comprehensive and not at their price.

Also read: 

Documents Required Life Insurance Claims

Do I Still Need Term Policy If I Have Health 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.