Term insurance offers an efficient way to cover risk. At the lowest premium, you can get a cover against the highest risk. By choosing riders, you can increase the effectiveness of a term insurance policy. You can add riders to the insurance policy by paying a little extra premium. As you assess the various kinds of risks to your life, you should include corresponding riders as well, so that you can enjoy the comprehensive coverage.
One opts for life insurance to stay safe in case of any unexpected incident that could hurt the finances of the family. Basically, insurance is a financial security tool. One may be involved in unfortunate events such as sickness or disability due to an accident. Such events will negatively impact your earning potential.
If you are hospitalized, you will need to bear hospitalization expenses which will include diagnostic tests, consultation fees, ambulance charges and room rent. A basic insurance policy will not address most of these risk factors. By buying a comprehensive insurance policy, you can overcome various health-related risks in the best possible way.
You can consider term policy. The premium that you pay towards the insurance policy will efficiently cover your risk. If there is a risk to the policyholder during the policy term, compensation will be offered by the insurance company. If no claim is made during the insurance term, you will not get back the insurance premium.
As the premium is very low compared with the money back policy, you can include additional riders to draw maximum benefit from the term insurance plan.
As per the IRDA rules, insurance companies offer various kinds of riders to offer better risk protection to policyholders. You can choose various riders as per their relevance and importance. The riders are offered to protect your and your dependents’ financial interests in the best possible way.
You should understand the fact that the sum of the premium collected under different riders should not exceed 30% of the basic plan insurance premium. The limit on health riders can be up to 100% of the basic premium.
The rider term should not exceed the policy term. The sum assured through all the riders should not exceed the sum assured by the basic premium.
Before buying the term insurance policy, you should understand the term of the rider, age at entry and sum assured and other factors that affect the insurance coverage. No riders are offered by the insurance company after the completion of 65 years of age.
Some insurance companies and plans allow rider additions only at the time of purchasing the insurance plan and new rider additions are not allowed during the renewal of the policy. You may not be able to add all the riders while buying the policy online. Hence, you should be aware of the policy terms and conditions to make the most of your insurance policy.
If you choose a critical illness or health-related rider, you will enjoy tax benefits under section 80D of the Income Tax Act. However, no tax exemption is offered under accident benefit rider. The income benefit, accident benefit, and other riders can be claimed under Section 80C of the Income Tax Act.
Riders are a great way to customize insurance policies. Insurance companies design various kinds of policies to fulfill the needs of the majority. Since the basic plan will not serve the purpose of people who come from various financial and health circumstances, riders provide an additional chance for policyholders to maximizing the benefit of insurance. Hence, you should be able to assess your current and future risks and accordingly, the relevant riders should be subscribed without fail.
If you would like to opt for different insurance policies from different insurance companies, you should be aware of the terms and conditions that are applied while claiming the policies. The claims process should be a simple and straightforward so that the very purpose of the insurance policy can be effectively served.
Riders offer additional benefits to insurance policyholders. The inclusion of riders is optional. When you include a rider, they will be applied to the occurrence of the event and you will get financial assistance higher than the basic sum assured offered by the insurance policy.
You can consider some of the following riders to increase the effectiveness of the insurance policy:
Conclusion
As it is not possible to predict the future, you should go for the most appropriate insurance policy to address your specific needs. A term insurance policy can be customized by including or excluding certain riders. Thus, you will pay the premium for the risk coverage anticipated by you. It is advisable to include riders as they come at a low extra cost and you can gain an enormous difference in payouts in addition to the sum assured.
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