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Importance of Riders In A Term Plan, Make An Informed Decision

Importance of Riders In A Term Plan, Make An Informed Decision

A term life insurance is one of the most basic financial needs of an individual. It is what protects and secures their family against an eventuality. It is the most pure form of life insurance, in the sense that it is essentially a life cover without a wealth or savings component.

What is a term insurance?

Term insurance is an insurance plan which provides a life cover for a fixed period of time. In the event of death of the policyholder within this period of time, the sum assured is paid to the nominee. A term plan provides a large sum assured at a relatively lower premium rate, which makes it an inexpensive alternative to other kinds of life insurance.

Term insurance riders

However, choosing a term plan is only the beginning. You should also consider enhancing your plan with riders and make the most of it.

Riders are, simply put, coverage enhancers. They are additional benefits that you can add on to your existing policy at a price and extend the scope of the policy. In order to choose wisely, you need to know about the different kinds of riders.

Important term insurance riders

These are some of the most useful insurance policy riders one can avail to enhance their coverage.

Accidental Death Benefit Rider

An untimely death due to an accident can put a lot of financial stress on a family. This rider provides an additional sum of money to the beneficiaries, in the event of death due to an accident. There are, however, exceptions to such policies. Accidental death due to war, unlawful activities, hazardous hobbies, etc will not be eligible for claims against the accidental death benefit rider.

Accidental Disability Rider

Sometimes, serious accidents can cause disabilities which impair the policyholder for life. They might be unable to work and earn like they did before. At such a time, having a disability rider can come in extremely handy. As per the policy terms, you might receive a separate sum assured. Your premiums too might be waived until the end of the policy term, while you continue enjoying all the benefits.

Child Support Benefit Rider

If you are a parent, you know that the most severely affected person after your demise would be your child. This rider pays an additional CSB sum assured upon death, so that the child's needs are taken care of and the child is able to celebrate the various milestones in life without worrying about financial security.

Other riders such as critical illness riders, surgical care riders and hospital care riders can also be availed by policyholders.

Why term life insurance riders are important

Eliminates the need for multiple policies
While a term insurance plan does provide a high sum assured, it may not cover everything under the sun. You need not go through the entire process of taking another policy to bridge the gap by opting for suitable riders.

Saves costs

A lot of people buy more than one term life insurance policy for added benefits. However, that becomes an expensive affair. Adding riders to your existing one is much more convenient and cost-effective.

Added support to family

The main purpose of term insurance is to support your family after you are gone. Adding riders might increase your premium now, but will only help your family when they need it the most. Especially if you are the sole earner of the family, leaving behind a large corpus is crucial.

Tax benefits

Life insurance premiums are tax-deductible under Section 80C of the Income Tax Act. If you opt for a rider for medical purposes, you can avail additional deductions under Section 80D of the Income Tax Act. A deduction of up to Rs. 25,000 can be availed by opting for a medical rider.

Insurance riders make term plans really comprehensive and more effective. If you are making the responsible decision of buying a term insurance for your family's well-being, do it right and enhance it with riders best suited to your needs.

iSelect Star Term Plan

One of the remarkable plans with useful riders available currently is the new iSelect Star Term Plan by Canara HSBC Oriental Bank of Commerce. The iSelect Star plan is a term plan that offers much more than a simple life cover for your family. You can take your pick of the various riders available: the Accidental Death Benefit rider, the Accidental Total Permanent Disability Rider, the Child Support rider and more. tIt has various built-in perks like spouse cover, increasing and decreasing coverage options, etc. You have maximum flexibility with multiple premium payment and payout options. Moreover, there is an added discount for higher sums assured and for female policyholders. With so many options for customisation and enhancement, the iSelect Star plan is quite the package.

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Frequently Asked Questions (FAQs) for Term Insurance Plans

A person can only purchase a term insurance plan till the age of 65 years, and they can choose the risk coverage for up to 99 years of age. One can easily buy the best online term plan between the age of 18 to 65 years.

This being a term insurance plan doesn't offer any payout after maturity or expiration date

Each insurance company has its own term insurance premium calculator. If you want to check out the premium quote, go for the iSelect Star term plan calculator. It gives a premium amount based on your age, gender, habits, education, and annual income.

You can purchase an iSelect Star term plan anytime between 18 to 65 years of age. This is a term plan with return of premium option – that means all the premiums paid throughout the tenure will be paid back to you if you outlive the policy.

It depends on your needs. For example, if you want to cover a child's education or wedding expenses, you have to include them in your coverage. Your premium will be calculated accordingly when you buy the best term plan in India.

If your key purpose is to give your Family financial protection, go for the best term insurance plan. And if you want some savings, in the end, go for a traditional life insurance plan. iSelect Star is a term plan with return of premium option. All the term insurance premium will be paid back to you, if you outlive the policy term.

Go for at least 12 times cover than your annual income. Or you can go as far as 20 times coverage as per your needs.

The right time is when you don't have anything to keep your Family safe from financial storms, and they rely on you for financial needs.

If you are unable to make the payment or suffering from a terminal illness, the best term insurance plan pays a part of the sum insured to treat your disease.

Term life insurance plan riders are attachment or endorsements made, while taking the term insurance policy, as a supplementary coverage to policyholders. Apart from the core death benefit, term insurance plan riders offer below-given additional benefits:

  • Accidental Death Rider When a person suffers from a terminal illness, his/her family ends up spending a significant amount in treatment and medical expenses. Accelerated death rider pays a part of the sum insured in advance to cover such costs and save the family from running out of cash.
  • Accidental Disability Rider If the policyholder can't pay the premium because of an accident or permanent disability, a sudden disability this pays the premium on behalf of the policyholder till completion of policy term or for a defined duration.
  • Critical Illness Rider If the insured person gets a heart attack, cancer, or any other critical illness, this rider pays a lump sum on valid diagnosis.
  • Premium Waiver Rider If the policyholder is unable to make payments due to income loss or disability, a premium waiver rider waives off all future premium payments. And the term insurance policy remains active until the expiration date.
  • Income Rider: This rider in a term insurance plan ensures that your family receives regular income + sum insured in case of unfortunate demise of life insured.

Anyone can go for life insurance as it offers some savings after the maturity date, but it doesn't cover the protection of your family . The best term insurance plan is solely designed for taking care of loved ones if something happens to you. Term insurance plans act as a shield between your family and sudden financial fall. They make sure that your family lives a healthy life even after you. With a little amount paid per year, you can be worry-free from the family's financial conditions.

Questions that you need to ask while Buying the Best Term Insurance Plan?

  1. 1. Are you buying a term plan with return of premium?
  2. 2. Amount of premium you have to pay based on your age, habits, education, and monthly income
  3. 3. The total number of benefits covered in the term insurance plan. Do they include benefits that you care about the most?
  4. 4. How to save money on tax if you pay for the term life insurance plan?
  5. 5. Do they offer regular income options?
  6. 6. Can you change the coverage and premium in the future?
  7. 7. Does the claim consider valid if death occurs outside India?
  8. 8. Which kind of death is not covered by a term insurance plan?
  9. 9. Can NRIs take a term insurance plan? If yes, what are the conditions?
  10. 10. Does the term insurance plan have a cash value if you decide to cancel the term insurance policy?
  11. 11. Under what circumstances can a term insurance plan be cancelled?
  12. 12. Can I pay the premiums online or make electronic payments?
  13. 13. What will happen to the term life insurance plan if the life assured starts smoking after purchasing the policy?
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