LIC Accidental Death and Disability Benefit Rider

In today's fast-paced world where everyone is in a hurry, disability and death due to accidents are very common. Both these contingencies not only cause substantial mental loss, but also financial loss. This is the reason most insurance providers including LIC have introduced Accidental Death and Disability benefit rider. 

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LIC’s Accidental Death and Disability benefit rider cover both these contingencies. This rider benefit pays in situation of death or disability caused to the policyholder in an accident. Some of the salient features of this policy are as follows:

Features of LIC Accidental Death and Disability Benefit Rider

  • Like any other rider, one has to purchase it as an add-on cover with a LIC life insurance policy by paying an extra premium.

  • A policyholder can buy this rider at the time of policy inception or during the policy term at the time of the policy's anniversary.

  • If one buys this rider during the policy term, the remaining term to pay the premiums must be at least five years. Moreover, the policyholder must not attain the age of 70 years in these five years.

  • The sum assured of the rider can be the same as the sum assured of the base policy.

  • The maximum sum assured for LIC Accidental Death and Disability Benefit rider allowed is Rs.1 Crore. However, this sum assured increases to Rs.2 Crore for LIC Jeevan Shiromani policy.

Benefits Offered by LIC Under Accidental Death and Disability Benefit Rider

Some of the benefits offered by LIC under Accidental Death and Disability rider are:

  • When Death Due to an Accident Occurs: If the policyholder dies because of an accident during the tenure of the policy, the sum assured with the base policy’s death benefit is paid to the nominee.

  • When Disability Due to an Accident Occurs: The following benefits are paid, in case of permanent and total disability caused because of an accident:

    • LIC pays the rider sum assured in equal monthly installments over 10 years. However, if the policyholder dies during this tenure or the policy tenure ends before the completion of 10 years, then the remaining installments will be paid in a lump sum with the disability and/ or death benefit mentioned under the plan.

    • All the future premiums of the policy would be waived off, but the plan would continue.

    • An insured is said to be suffering from permanent and total disability if he/she is unable to perform any of the following day-to-day tasks:

      • Unable to put on and off his/her clothes

      • Unable to maintain even personal hygiene even at the lowest level

      • Unable to use the toilet

      • Unable to eat the food that is served on the plate

      • Unable to sit on a chair from his/her bed or vice-versa

      • Unable to walk even for a shorter distance like within the home

To avail the benefits of this rider, the accident must have to be sudden, involuntary, and unforeseen. It must be caused by some external visible and violent means. Moreover, death and disability should occur within 180 days of the accident.

Exclusions of LIC Accidental Death and Disability Benefit Rider

LIC will not pay the benefits offered by Accidental Death and Disability rider in the following situations:

  • In case of self-inflicted injury.

  • If it is an attempted suicide.

  • If the accident occurred under the influence of alcohol or other intoxicating drugs.

  • If the accident occurred because of the mental imbalance of the policyholder.

  • If the accident occurred due to the involvement of the policyholder in some riots, undeclared or declared war, civil rebellion, etc.

  • If the accident occurred due to the involvement of the policyholder in some adventurous activities like river rafting, bungee jumping, paragliding, racing, mountaineering, etc.

  • If the accident occurred due to the involvement of the policyholder in some illegal act that is performed with some criminal intention like stealing, robbing, etc.

  • If the death or disability occurred due to the Military service. However, the exclusion will be null and void if the policyholder was not in his/her duty or was caught up in some natural calamity in his/her country.

  • If the death or disability occurred if the policyholder was engaged in police services.

  • If the policyholder dies after 180 days of the accident.


Surrender Benefits Under LIC Accidental Death and Disability Benefit Rider

There is no surrender value or paid-up value involved in this rider benefit. However, if the policyholder has surrendered the base policy, the premium of the rider to continue the cover will be refunded. The refund would be calculated on the following bases:

  • If it is a regular premium policy, then there will not be any refund.

  • If it is a single premium paying plan, 90% of the single premium of the rider is paid.

  • In case of a limited premium paying policy:

    • If the policy is surrendered during the premium paying term, then:

      • 80 percent * (annualized premium for every Rs.1000 Accident Benefit SA – 1) * (Accidental Benefit SA /1000) * (Number of years for which the premiums concerning this rider benefit have been given)

    • If the policy is surrendered after completion of the premium paying term, then:

      • 80% * (annualised rider premium for every Rs.1000 Accident Benefit SA – 1) * (Accident Benefit SA / 1000) * (PPT for the rider) * (outstanding term for the rider in complete years / (Rider term – PPT for the rider))

Tax Benefits Under LIC Accidental Death and Disability Benefit Rider

The premiums that a policyholder has paid towards the rider benefit are tax deducted U/S 80C of the Income Tax Act. The death benefit that a policyholder receives is also fully exempted from tax U/S 10 (10D).

Documents Needed to Make a Claim for LIC Accidental Death and Disability Benefit Rider

In case a policyholder wants to claim the rider benefit, he/she has to provide the below mentioned documents:

  • The certified copies of the Police FIR and inquiry

  • Panchnama’s copy

  • Policyholder’s post mortem report

  • Cutting of newspaper wherein the report of the accident is shown

  • Driver's license in case of accident through the car that is being driven by the policyholder at the time of the mishap

  • The final verdict was given by the Sub-Divisional Magistrate

  • Records of the treatment if the policyholder has undergone hospitalization after the occurrence of the accident

Wrapping Up!

If you are planning to add a rider to your base life insurance policy, you can consider buying it. For your understanding, we have mentioned some of the features, benefits, and details of the LIC Accidental Death and Disability benefit rider.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
^Trad plans with a premium above 5 lakhs would be taxed as per applicable tax slabs post 31st march 2023
+Returns Since Inception of LIC Growth Fund
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
++Returns are 10 years returns of Nifty 100 Index benchmark

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