Types of Riders in Term Insurance and how to choose them


Most of the people in India are not aware about additional facilities offered along with term insurance plans. For instance, there are riders which provide added coverage. There are different types of riders as well. Read this article for more information regarding riders available with term plans.

Riders in simple, words add additional benefits to the actual policy. It does not impact the actual policy rules in any way and provides you extra protection in addition to life cover from the insurance policy. There are different types of riders available and one might get confused while selecting a particular rider for his policy. An important thing to remember here is that one has to pay extra money for the rider benefit. In this post I will explain, the different riders available with term insurance and the points to consider while choosing them.

Different Types of Riders in Term Insurance

Here are the different types of riders in term insurance:
  1. Accidental Death: This is the most common rider available in almost all the term plans. This rider entitles extra compensation if the death of the policy holder occurs due to accident. For instance, suppose a person "A" takes term plan of Rs 20 lakhs and adds rider of Rs5 lakh. In this case, if A dies during the plan tenure due to accident his family will get a total of Rs 25 lakh. If he dies due to any other reason, he will be paid Rs 20 lakh.

  2. Permanent and Partial Disability: Another useful rider that allows compensation for the policy holder if he gets disabled permanently or partially during the insurance period due to an accident. The amount paid is certain percentage of the sum assured and it is paid for fixed duration (5-10 years). You should get the details checked from the official website or agent before opting for this facility.

  3. Critical Illness: If you opt for this rider, you are eligible for getting compensation in case of a critical disease during the insurance period. The diseases usually covered are heart stroke, cancer and paralysis.

  4. Waiver of premium: This a unique rider that allows the policy to continue even if you are not able to pay the future premiums due to disability or income loss.

  5. Income Rider: This rider is present in very few plans and it allows the family of the policy holder to get fixed income annually after his death.


How to choose Riders

Following things should be considered while taking term insurance plan
  1. First of all the plans do not have all the riders. In fact, talking about the HDFC Life Click 2 Protect, it does not allow any rider at all. While taking a particular term plan, first examine which riders are allowed by it. Thereafter, choose the riders you want as per your financial needs.

  2. The nature of work also plays an important role here. For instance, if you travel a lot, you should take accidental benefit riser for sure.

  3. There is no need to opt for all the riders allowed by the particular plan as you have to pay for each rider every year.


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