What are Term Insurance Riders?

Term insurance riders are additional benefits or options that can be added to a basic term life insurance policy. These riders enhance the coverage and provide policyholders with more flexibility and protection tailored to their specific needs.

The term "rider" likely originates from the concept of "riding" on top of the existing policy, implying an addition or amendment. This usage aligns with the general meaning of "rider" as something that is added or attached to another/base item.

Here are some types of term insurance riders available in India:

1. Critical Illness Rider: This rider pays a lump sum amount if the policyholder is diagnosed with a critical illness specified in the policy, such as cancer, heart attack, or stroke. It helps cover medical expenses and loss of income during treatment.
2. Disability Benefit Rider: This rider provides financial support in case the policyholder becomes permanently or temporarily disabled due to an accident or illness. It can offer a regular income or a lump sum payment.
3. Waiver of Premium Rider: If the policyholder becomes disabled or critically ill, this rider waives off future premium payments while keeping the policy active. This ensures that the policy remains in force even if the policyholder is unable to pay premiums.
4. Terminal Illness Rider: This rider allows the policyholder to receive a portion of the sum assured if diagnosed with a terminal illness, typically with a limited life expectancy.
5. Accidental Death Benefit Rider: This rider provides an additional sum assured to the nominee in case the policyholder dies due to an accident. It is designed to offer extra financial security in the event of an unforeseen accident.
6. Family Income Benefit Rider: This rider provides a regular income to the nominee for a specified period in case of the policyholder's death. It ensures that the family has a steady income stream to meet their financial obligations.
7. Child Education Rider: This rider ensures that a certain amount is paid to fund the education of the policyholder's children in case of the policyholder's untimely demise. It helps secure the future of the children.
8. Return of Premium Rider: This rider ensures that if the policyholder survives the policy term, the total premiums paid are returned at the end of the term. This rider is often seen as a way to get some value back from the policy.
9. Hospital Cash Benefit Rider: This rider provides a daily cash benefit for each day the policyholder is hospitalised due to illness or injury. It helps cover additional expenses incurred during hospitalisation.
10. Surgical Benefit Rider: This rider provides a lump sum payment if the policyholder undergoes a specified surgical procedure. It helps cover the costs associated with surgery and recovery.

Please Note that a term insurance provider might not provide all the above listed riders, but the top 5 are the common ones, mostly all the term insurance companies provides.

Adding riders to a term insurance policy can increase the overall cost of the premium, but they can also provide valuable benefits and peace of mind. Some of the riders are added free of cost to the Basic Term Insurance (important to check this while comparing the prices). It's important for policyholders to carefully consider their specific needs and discuss options with an insurance advisor to determine which riders may be beneficial for their situation.

#walkthetalk Suggestion : My personal favourites are the below and I have added them in my term plan.

Critical Illness rider :  Well you may think it is anyways covered in Health Insurance Policy why to add it in Term Plan. I almost did the same mistake. Some Health Insurance policies won't cover all the critical illnesses or some exclude them in the initial waiting period. You can add them as a rider in Health Insurance, It will only cover for your medical expenses and also there is high chance the rider price increases every year. So If you add it as Term Insurance rider, It pays a lump sum benefit and it will helpful to you since rider charge is fixed through out the term. Please do check the list of Critical Illnesses covered.

Waiver of premium rider : As described above it is helpful in an unfortunate scenario where an individual is unable to work and not in an earning situation. 

Terminal Illness rider : As described above policyholder will receive a portion of the sum assured if diagnosed with a terminal illness. This can help cover medical expenses or fulfil any financial needs during the final stages of life.

We would strongly suggest the above riders. But it is completely upto the specific needs of the individual, please evaluate carefully while adding the riders as per your needs and affordability.

Best Term Insurance Policies for 2025 in India

• Max Life Smart Secure Plus
• Tata AIA Maha Raksha Supreme
• Bajaj Allianz Smart Protect Goal
• ICICI Prudential iProtect Smart

Please share it with your friends and family if you find it helpful. Feel free to reach out to us for any queries at hello@honvest.com

Thanks,

Honvest Team.