Term life insurance policies offer a predetermined sum to the policyholder's family in the event of the policyholder's unfortunate demise. This type of policy remains active for a set duration and is one of the most affordable options available in the market.
While term life insurance provides essential coverage, there are additional features that can enhance its benefits. One such feature is the option to include add-ons or riders, which can expand the scope of coverage.
This blog will highlight the various add-ons and their benefits to add a layer of financial security to your term life insurance.
What are term life insurance add-ons?
Add-ons or riders in term life insurance are additional coverages that a policyholder can include in the term life insurance to expand the scope of coverage. These supplementary options typically require the payment of an extra premium. These riders enhance the financial protection the basic term life insurance policy provides, offering specific coverage for various unforeseen circumstances, such as accidents, disabilities, or critical illnesses. They enable policyholders to customise their insurance coverage to meet their needs and circumstances in a better way.
Common add-ons for term life insurance
Commonly opted add-ons or riders in term life insurance include:
1. Waiver of Premium rider
This rider acts as a safety net by waiving off future premiums of term insurance if the policyholder encounters serious illnesses, disabilities, or critical injuries. With this rider, the policyholder can prioritise their health without worrying about premium payments.
2. Critical Illness rider
A critical illness rider provides a lump sum payout in case of a covered critical illness, aiding in meeting related medical expenses or compensating for lost income during treatment. It comes in two types: a standalone rider that offers additional benefits on top of the base sum assured and an accelerated rider that reduces the base sum assured upon payout.
3. Accidental Death Benefit rider
This rider provides an extra payout if the policyholder's unfortunate demise results from an accident. It ensures that the family receives an additional sum and the base sum assured, offering added financial protection, especially for individuals regularly on the road for work or leisure.
4. Terminal Illness rider
Similar to the Critical Illness rider, this feature offers a cash benefit if the policyholder is diagnosed with a terminal illness. It provides flexibility in using the benefit for medical treatments or financially securing the family.
5. Life Stage Benefit rider
This rider allows the policyholder to increase the coverage upon significant life events like marriage or having children. It is suitable for individuals planning to start a family and helps avoid the need for an additional term plan during specific life stages.
6. Return of Premium rider
With the Return of Premium rider, the policyholder receives a refund of the premiums paid at the end of the policy term if they outlive it. Although it involves higher premiums than regular term plans, it offers a substantial sum if the policyholder survives without making any claims.
Advantages of add-ons on term life insurance
Here are some advantages of adding riders to your term life insurance:
1. Enhanced coverage: Add-ons provide additional layers of protection beyond the basic life cover, ensuring comprehensive financial security for the policyholder and their family in various unforeseen circumstances.
2. Cost-effectiveness: Opting for add-ons is often more affordable than purchasing separate standalone policies, allowing policyholders to access extended benefits without financial strain.
3. Exclusive protection options: Certain riders, such as those for critical illnesses or accidental disabilities, might only be accessible through add-ons, making them suitable for individuals seeking specific and comprehensive coverage tailored to their needs.
4. Customisation: Add-ons enable policyholders to tailor their insurance plans according to their unique requirements, ensuring that the policy aligns closely with their financial goals and circumstances.
Should you opt for add-ons with your term life insurance?
Term life insurance is a reliable and affordable option for ensuring financial security for you and your loved ones in the event of an unforeseen demise. However, the value of term life insurance often lies in its flexibility, allowing policyholders to enhance their coverage by including add-ons or riders. Add-ons, such as the Waiver of Premium, Critical Illness, and Accidental Death Benefit, offer invaluable support during challenging times, providing financial stability and protection against various contingencies.
Moreover, these riders are often more cost-effective than standalone policies, making them a practical choice for individuals seeking comprehensive coverage without incurring substantial expenses.
Are you intrigued by the benefits of term life insurance and its valuable add-ons? Explore your options and discover financial peace of mind with Tata Capital Wealth.
Visit the Tata Capital Wealth website today!
16 November 2023
4 mins read
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