How to Strengthen your Term Insurance Cover with Disease and Disability Riders?

A term insurance policy plays an inevitable role in ensuring the financial safety of a family. It pays the beneficiary a financial aid to keep the family afloat when the insured, who would be an earning member of the family, passes away. But will a term insurance policy ever benefit the insured itself at a time of crisis? Let’s understand term insurance and its possibilities of helping the insured.

What is term insurance plan?

Term insurance is a type of life insurance policy. It protects the insured’s family financially in case of the unfortunate demise of the policyholder.  As the name suggests, the insurance policy will be for a certain period of time and there will be a fixed sum insured.

While term insurance provides you with basic and much-needed security, you can add riders or add-ons to enhance your insurance policy’s coverage. Let’s see what riders are.

What are riders in a term plan?

A rider is an add-on to your existing term insurance to enhance its coverage. Availability of riders could be different for different insurance providers, but most commonly subscribed ones are –

  • Guaranteed insurability rider
  • Accidental death rider
  • Waiver of premium rider
  • Critical illness benefit rider
  • Family income benefit rider
  • Child term rider
  • Long-term care rider
  • Return of premium rider

Of these, waiver of premium rider and critical illness benefit rider will enhance coverage to include unforeseen accidents to the insured as well. Let’s examine what they are and how they will strengthen your term insurance policy.

Critical illness benefit rider

With a critical illness rider in place for your term life insurance, you will receive a lumpsum amount in case if you are diagnosed with a critical illness during the period of your term insurance. Different insurance providers could have different diseases in the critical illness categories, but the most common ones include

  • Heart attack or cardiac arrest
  • Cancer
  • Stroke
  • Kidney failure
  • Lung failure
  • Major organ transplant
  • Alzheimer’s disease
  • Parkinson’s disease
  • Multiple Sclerosis

The severity of your disease could also play a part sometimes. For example, all types of cancers might not be eligible for monetary benefit. It depends on the policy of the insurance provider.

Another thing that is depended on the insurance provider’s terms is the payout amount. While some insurance providers pay the full sum insured, some only pay a part of the coverage amount.

If you claim a critical illness cover, your beneficiary will only receive what is left after your payout when they claim.

Waiver of premium rider

This rider will waive off all your remaining term life insurance premiums to keep your insurance policy valid if you are disabled in an accident or due to injury. This rider helps you keep the protection of your family valid even at a stage where you are not able to pay the premiums due to a psychical disability.

There are two situations in which you can claim a waiver of premium. Either if you are disabled for at least six months or if you are diagnosed with a critical illness. There is also 90 days waiting period for this rider. That means you can only claim the rider benefits if your disability or illness happens after 90 days of buying the term plan.

Claiming the benefits of this rider will not change any other terms and conditions and your beneficiary will still be eligible for the agreed-upon insured sum in case if they have to ever claim it.

How to add disease and disability riders to your term plan?

You can add these riders when you buy term plan itself and you can easily buy term plan from any of the insurance provider websites. The process is hassle-free and completely paperless these days. You can also use a term insurance plan calculator to help you with the math of your term insurance plan.

If you already have a term plan, the best approach is to talk to your insurance provider to know if you can add a rider to your current insurance plan. This will increase your premium amount and your insurer might need additional documents.

If you are planning to add a rider to enhance your term plan’s coverage, don’t wait too long. Call your insurance provider and enhance your protection today!

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