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.
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.
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+ Term Plan
One of the remarkable plans with useful riders available currently is the new iSelect+ Term Plan by Canara HSBC Oriental Bank of Commerce. The iSelect+ 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+ plan is quite the package.