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Should You Opt For Additional Benefits with Your Term Insurance Policy?

Should You Opt For Additional Benefits with Your Term Insurance Policy?

Term Insurance Riders

Who doesn’t like some additional benefits with the products they buy, be it your car insurance or an insurance policy? There’s also an inherent similarity between features added to your car and added to your term policy – both make your life easier.

But, before you decide to go only by the hunch, it’s better to know exactly how the benefits will add to your convenience. Let’s take a look at what these added benefits are and what they mean to you or the family you are trying to protect with the life insurance policy.

What Are Additional Benefits in Term Insurance?

Term insurance plans feature many benefits you can add to the base policy, to expand your coverage. Base term policy is simply a contract to provide your family with a large sum assured in the event of your untimely demise.

Additional benefits may add two different aspects to the base plan:

  • Provide financial support on events other than death
  • Make survival or life easier for the family after a claim

The first type of additional benefits adds to your sum assured, while the second type will only affect how the policy pays the selected S.A. to your nominees.

Add-Ons with iSelect+ Term Plan

Benefits Which Improve Coverage:

Benefits like accidental death or disability cover, critical illness covers add to your sum assured and make your term plan more useful.

  • Accidental Benefits : Accidents can cause permanent or temporary disabilities, affecting your earning capacity temporarily or for a long-time. Accidental death and disability benefit provides your family with additional funds to deal with the temporary or permanent disability received from an accident.
  • Critical Illness Benefit: Similarly, life-threatening illnesses like cancer, heart attacks, or renal failures can cause your income to stop. Not only that but you will also need a huge sum for treatment if you survive long enough. Thus, you can add critical illness benefit and increase your cover to handle this kind of situation.
  • Child Support Benefit: Online term insurance plan from Canara HSBC OBC Life, iSelect Star gives you the option to safeguard your children’s dream with an added benefit cover. This cover helps your family save money separately for your child’s education and other goals. Your family receives this benefit over and above the normal sum assured under other benefits or life cover.

Benefits to Make Life Easier

You have two benefits in this category as well:

  • Waiver of Premium option
  • Regular Income Pay-out option

Waiver of Premium: Whenever you have to file an accidental or critical illness claim, your income has been likely stopped or, at least, reduced. Thus, it doesn’t make sense for the insurer to ask additional premiums from you to continue your life cover.

Therefore, if you plan to pay regular premiums for a long period, you can opt for a premium waiver benefit. You will not have to pay any further premium for continuing the life cover in the event of accidental or critical illness claims.

Regular Income Pay-out:

Regular income is what sustains your household. Whenever a death claim pay-out happens, the family has lost the source of income. The only remedy is to reinvest the life insurance proceeds to build a new income stream.

Annuity plans from life insurers happen to be the best option to create a safe and long-term source of regular income. However, what if your family doesn’t have to bother about reinvestment? What if they can receive a regular monthly income as part of death claim itself?

Regular income pay-out option does exactly that for your family. You can set aside a part of the total sum assured under your term policy towards a regular income. The family will receive a monthly income based on this sum for a predefined tenure.

Which Additional Benefits Do You Need?

It should be easy for you to see that accidental, critical and regular income pay-out benefits are important. You may have a choice when it comes to premium waiver benefit, however.

Premium waiver works better for those who are paying premiums for more than one year at least. If you decide to go for single premium payment for your term policy, you will not need premium waiver anymore.

But if you want to pay the premiums over the course of a few years, the premium waiver is a useful option for you.

Does it make the Term Plan Expensive?

Adding more benefits and features does increase the cost, but the overall cost still remains nominal compared to the total benefit available. However, in the case of insurance, the increase in annual premiums is nominal compared to the life-long benefits for your family.

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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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