Add-Ons to Your Term Insurance
Additional benefits/risk covers might be built-in some term plans making them more comprehensive. A comprehensive term plan aims to cover the financial risks associated with death, disease and disability (3D). Some of these risk covers are in-built and some are offered as riders or add-ons by charging an additional premium.
Some of the most popular riders or add-on covers are:
Accidental Death Benefit Rider
This rider pays an additional sum to the nominee, over and above the sum insured, in case the insured dies in an accident. Such plans are preferred by younger customers who perceive a higher threat of accident as a cause of death.
Critical Illness Cover
This cover pays a lump sum amount to the insured one diagnosis of any of the specified critical illnesses. This amount can be used as the insured sees fit and has no sub limits or conditions imposed. Critical illnesses can lead to massive medical expenditure which can far overshoot the cover available in mediclaim / indemnity-based plans. Hence, critical illness covers become truly a critical component of protection needs of an individual. Such plans are offered on accelerated or additional basis. In case of accelerated critical illness covers, part of the death benefits (sum assured) is paid in advance at the time of critical illness diagnosis and the rest is paid on death. Additional critical illness riders provide a critical illness sum assured independent of and without reducing the death benefit.
Waiver of premium
This rider waives off all the future premiums in case a covered condition such as disability or critical illness occurs. In such cases, the policy continues to be in force despite the premiums not being paid and death benefit is paid in case of unfortunate death during the term.
Married Women’s Property Act (MWPA)
Another detail to check is if the policy has a provision for Married Woman’s Property Act, 1874. This provision can be added to the policy to ensure that the sum insured under the policy is paid to a trust that only the wife or children of the insured can benefits from. This amount cannot be used to pay off any other creditors, relatives, or even be given away through a will.