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Things You Should Know About Term Insurance Riders

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It is always wise to think about the future in advance especially when it comes to finances. People begin planning their old age by investing in policies like a retirement pension plan, to ensure their finances will be sorted in the future when they can longer continue to work. What they should also look into is a term insurance plan. It guarantees a protected future for their loved ones in their absence. In this article, we will talk about term insurance rider. But before we begin, let us understand what does term insurance plan means.

A term insurance plan offers the policyholder financial coverage for a specific period of time. If the insurer passes when the plan is active, the beneficiary receives the death benefits. The insurer needs to pay premiums in order to avail the benefits. However, these term insurance plans can be made more lucrative with the addition of a term insurance rider. By agreeing to pay an additional premium, the policyholder gets the benefits that go beyond the basic death benefits offered by the policy provider. The premiums paid for a term insurance rider cannot exceed the premiums paid for the term insurance policy. Mentioned below is a list of a few important riders that offer additional benefits to a term insurance policyholder.

 

  • Accidental Death Rider

 

In a situation where the policyholder dies in an accidental death during the policy term, the insurance company pays an additional sum to the beneficiary.

 

  • Critical illness rider

 

Illnesses like cancer, heart attack, kidney failure, and so on, is enough the drain bank accounts. This term insurance rider compensates the policyholder if he or she is diagnosed with a disease that is mentioned in the policy.

 

  • Accelerated death benefit rider

 

If the policyholder is diagnosed with a terminal disease, this term insurance rider allows the insurance company to pay the beneficiary a part of their lump sum amount to use for medical expenses.

 

  • Waiver of premium rider

 

In a scenario where the policyholder is unable to pay the premiums due to loss of income or disability, with this rider, the policy remains active but the future premiums are waived off. Without it, the policy expires.

 

  • Accidental disability benefit rider

 

If the policyholder becomes partially or permanently disabled, the insurance company will pay a particular percentage of the sum for a period of 5 to 10 years. 

You can choose the term insurance riders you want to include in your policy. Now that you know the numerous riders, the choice will be easier.

 

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