In the current world we are living, comprehensive insurance coverage is more important than ever. While both health and term insurance provide a solid foundation, adding the right riders to your respective policies can significantly improve your existing coverage. Consider riders as valuable add-ons, extending the scope. In this article, we will be discussing a few popular riders that if added to your term and health insurance plans will assist in providing better coverage to both the insured and their family.
Riders available on your term insurance policy
Term life insurance is a fairly simple policy, yet it is absolutely necessary. If a policyholder unfortunately passes away while the insurance is in effect, the coverage or the sum assured from the term plan will cover his or her family’s financial needs. And, if you add the right type of riders to your term insurance plan, it will provide more comprehensive protection to your family and the insured. A rider essentially is an additional benefit or coverage that you can add to your standard term insurance plan. These riders add further protection or benefits to the basic coverage provided by the term insurance plan.
To buy a rider, one has to pay an additional premium. The premium payable is determined by the sum assured, the policyholder’s age, the policy term selected, the payment term, and so on. Now that you understand what a rider is, let’s take a look at some popular riders that are available with term plans.
Income Benefit Rider: The income benefit rider ensures that if the policyholder dies during the policy’s term, his or her family will receive the sum assured as a monthly income for a defined period rather than a lump sum. However, when purchasing the rider with a term insurance plan, the policyholder must determine how long he or she wants their dependent to receive this benefit. Assume a policyholder has a Rs.1 crore policy and adds an income benefit rider with a 10-year period. After he dies, his family will receive the Rs.1 crore payment assured in a staggered way over a 10-year period, averaging Rs.10 lakh each year.
Waiver of premium for disability and critical illness riders: If a policyholder purchases a premium waiver on disability rider, he or she will not be required to pay the term insurance plan premium in the future in the event of permanent disability. However, the insurance will stay active until the end of the term, and the sum assured remains unchanged.
Premium waiver for critical disease riders: Under this rider, if a policyholder is diagnosed with one of the critical illnesses listed in the policy, his or her future premiums will be waived. And, as with the waiver of premium on disability, the policy will be valid until the end of the tenure.
Terminal Illness Rider: Having this rider assures that if the policyholder suffers from a terminal condition and anticipates passing away within the following 6 or 12 months, the insurer pays the sum assured to the insured/nominee without delay. However, this must be confirmed by registered medical practitioners in that specific subject.
In addition to selecting the right riders for your health and term insurance plans, it’s crucial to consider accident insurance as a complementary coverage option. This type of insurance provides financial protection in the event of unexpected accidents, ensuring that medical expenses and other related costs are covered. By integrating accident insurance into your overall insurance strategy, you can enhance your financial security and peace of mind, knowing that you are prepared for unforeseen circumstances. This comprehensive approach allows you to tailor your insurance portfolio to meet your specific needs, offering a robust safety net for you and your family.
Let’s say a policyholder has a Rs.1 crore term insurance plan and is in the latter stages of cancer. If the doctor who is treating him/her verifies that the insurer will die within a few months, the entire sum assured for the insurance will be given to him right away. However, to be eligible for this benefit, the insured must have the terminal illness rider.
Critical Illness Rider: Under this critical illness rider, if a policyholder is diagnosed with one of the critical illnesses listed in the policy (the list typically ranges from 8 to 40), the insurer will pay the sum assured. Assume you have a Rs.1 crore term insurance plan that includes a Rs.20 lakh critical illness rider. If you are diagnosed with a critical illness, the insurer will only pay you Rs.20 lakhs as per the critical illness rider policy. This money can be used for any purpose, including treatment.
Riders available on your term insurance policy
Health insurance plans act as an important financial safety net, covering medical bills. Here are the five key riders to consider when selecting a health insurance plan.
Critical Illness Rider: A critical illness rider covers specific critical illnesses, such as cancer, heart attack, stroke, organ transplant, and kidney failure. If you are diagnosed with one of the covered critical illnesses, the rider will pay a lump sum payment regardless of the actual medical expenses incurred. This rider may help pay the expensive expenses of specialist treatments, drugs, and lifestyle changes required for critical illness recovery.
Hospital Cash Daily Allowance Rider: A hospital cash daily allowance rider pays a fixed cash reward for each day you are hospitalized due to illness or accident. However, it is vital to note that such an allowance will only be granted if the patient is hospitalized for longer than 24 hours. Furthermore, if the hospitalization takes place in an intensive care unit (ICU), the allowance is doubled. This rider is especially useful given that health insurance plans may not cover these day-to-day costs. It adds an added degree of financial security, assuring that you can cover the associated expenses throughout your hospital stay.
Maternity Rider: If you intend to start a family, a maternity rider can be an important addition to your health insurance plans. This rider covers expenses associated with prenatal, delivery, and postoperative care. Maternity riders guarantee that parents have comprehensive coverage for maternity-related medical expenses, easing financial stress and enabling them to focus on the joys of receiving a new life.
So we are saying,
Riders are important upgrades to both your term and health insurance plans that allow you to tailor your coverage to your individual needs. Consider these riders in light of your specific situation and needs.
