Term insurance is an important financial instrument that can keep your loved ones protected against the financial hurdles in your absence. When you buy term insurance, you pay for a life cover^` that offers you protection for your life during the term of the policy. In order to enhance the coverage of your plan, insurers also offer riders or add-on benefits with term insurance. These optional benefits can be bought at a small additional cost and offer additional protection, such as critical illness cover, disability cover, accidental death cover, and more.

What are Term Insurance Riders

Term insurance riders are optional add-ons to your basic term insurance policy to enhance its coverage. Riders enable you to enhance your insurance policy to match your unique requirements. You can add a rider at a marginal extra cost over the base premium.

Why do you need riders in term insurance?

Riders or add-on benefits are essential additions to your plan and offer many advantages. Here are some reasons why you need term insurance riders:

• Term insurance riders can improve the protection of an existing plan. These add-on benefits can take care of some unforeseen circumstances that can cause considerable financial damage. They make sure that you are always covered and have a security blanket to fall back on
• The treatment of a critical illness can impact your savings and come in the way of your day-to-day expenses and future plans. Optional benefits such as a critical illness cover can cover the costs of treating such life-threatening and extremely costly illnesses
• In case of an unforeseen death due to an accident, add-on benefits can offer better coverage and protection, to both you and your loved ones

Benefits of Term Insurance Rider

Term insurance riders enhance your term insurance plan's coverage by offering additional financial protection. They also offer many other benefits. Below are some of their advantages:

Enhanced Sum Assured

Riders can offer you an increased sum assured. Some policy combinations, like term insurance with an accidental death benefit rider, give you additional financial coverage. For example, if the base policy provides a ₹ 1 crore sum assured and an accidental death benefit rider is added to it, then the nominee will receive an extra ₹ 50 lakh in case of an unfortunate event of your demise due to an accident. This will enhance your overall coverage to ₹ 1.5 crore.

Protection for Family

Term insurance riders offer financial security to the family of the insured. These riders provide additional financial support to beneficiaries beyond the base policy if an unfortunate event occurs, such as an accidental death, disability or diagnosis of a critical or terminal illness.

Affordable

Term insurance riders are a cost-effective way to ensure better financial security in the long run. Buying separate covers can be more expensive. Adding riders to an existing plan can be a lot more affordable.

Tax Benefits

Similar to the tax-deductible premium of a term insurance policy under Section 80C^# of The Income Tax Act, 1961, riders also come with their tax benefits. You can claim deductions for the premiums paid towards the accidental death benefit rider under Section 80C^# and the premiums towards the critical illness rider under Section 80D^# subject to the conditions prescribed under them.

Conclusion

The combined coverage of a term insurance policy and its riders ensures your family's financial stability. It is advised to evaluate and understand your need for riders and compare their premium before selecting the ones that can help you and your loved ones at critical times.

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