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Term Insurance Riders: Meaning, Types & Benefits

Have you ever wondered how you can enhance the coverage of your term insurance plan? While a basic term plan offers essential protection, term insurance riders can provide additional benefits that address specific needs and offer extra financial security. In this article, we will explore the meaning, types, and benefits of premium term insurance riders in India.

Term insurance riders are optional add-ons that can be purchased along with your base term insurance policy. These riders offer you the opportunity to customise your coverage according to your unique requirements. By paying a small additional cost over your base premium, you can ensure comprehensive protection for yourself and your loved ones.

Understanding term plan insurance riders

Term plan insurance riders are designed to enhance the coverage provided by your basic term insurance plan. They offer various advantages and additional benefits that cater to unforeseen circumstances and potential financial damages. Let’s take a closer look at why these riders are essential for your term insurance plan:

  1. Improved protection: Term insurance riders provide enhanced financial protection by covering specific risks or events that may not be included in the base policy. For example, an accidental death benefit rider provides extra coverage in case of an unfortunate accident resulting in death.
  2. Critical illness cover: The treatment of critical illnesses often comes with substantial expenses that can disrupt your savings and financial stability. With a critical illness rider, you can receive a lump sum payout upon diagnosis of a covered illness without having to worry about hospital bills.
  3. Disability cover: In case of permanent or partial disability due to an accident, disability riders offer financial aid and protection. This benefit ensures that you have adequate funds to support yourself and your family during challenging times.
  4. Waiver of premium: If you become disabled and are unable to work or earn money, a waiver of premium rider ensures that all future premiums are waived off while keeping your policy active. This allows you to focus on your well-being without the burden of premium payments. Always use a term insurance premium calculator to know about the premiums before purchasing a plan.
  5. Income benefit: An income benefit rider provides your nominee with a fixed part of the life cover amount as a regular income upon maturity. This can be a valuable replacement for lost income, ensuring that your family’s financial needs are met even in your absence.
  6. Terminal illness rider: This rider offers an accelerated death benefit in case of a terminal illness diagnosis. It allows policyholders to receive the sum assured in advance, helping them cover health-related expenses and providing financial support during difficult times.

Types of term plan insurance riders

Now that we have explored the importance of term insurance riders, let’s delve into the different types available:

  1. Accidental death benefit: This rider offers additional financial protection in the event of an accidental death on top of the base life cover amount. It ensures that your family receives extra coverage to manage future expenses.
  2. Accidental disability benefit: In case of permanent or partial disability due to an accident, this rider provides financial aid and support. The payout is determined based on the severity and extent of the disability.
  3. Critical illness benefit: A critical illness rider provides a lump sum payout upon diagnosis of a covered critical illness without requiring hospital bills for reimbursement. This benefit helps cover medical expenses and ensures financial stability during treatment.
  4. Waiver of premium: The waiver of premium rider cancels all future premium payments if you become disabled and are unable to work or earn money. Your policy continues without any interruptions, ensuring protection for your loved ones.

Benefits of term plan insurance riders

Term insurance riders offer several benefits that enhance the overall coverage and ensure greater financial security for policyholders and their families:

  1. Enhanced sum assured: By adding riders to your base term insurance plan, you can increase the sum assured amount. For example, combining term insurance with an accidental death benefit rider can provide an additional financial coverage, offering greater protection for your loved ones.
  2. Protection for family: Term insurance riders provide additional financial support to beneficiaries beyond the base policy in case of unfortunate events such as accidental death, disability, or diagnosis of a critical illness. This ensures that your family’s financial needs are met during challenging times.
  3. Affordability: Adding riders to your existing term insurance plan is a cost-effective way to enhance your financial security in the long run. Buying separate covers for specific risks can be more expensive, making riders a more affordable option.
  4. Tax benefits: Just like the base term insurance premium is eligible for tax deductions under Section 80C of The Income Tax Act, 1961, riders also come with their own tax benefits. Premiums paid towards riders such as accidental death benefit and critical illness rider can be claimed as deductions under relevant sections of the Income Tax Act.


By understanding and utilising term insurance riders effectively, you can enhance the coverage and benefits provided by your base term insurance plan. Riders offer additional protection against specific risks and events, ensuring you and your loved ones have comprehensive financial security. Evaluate your needs, compare premiums, and choose the riders that align with your requirements to create a well-rounded term insurance plan that safeguards your family’s future. As mentioned above, use a term insurance premium calculator to decide on the premiums of your term plans.

Remember, while selecting term insurance riders, it is crucial to consider their relevance to your situation and consult an insurance advisor or expert who can guide you through the decision-making process.



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