How Riders are Needed for Term Plan

• 11 September 2016 | 919 Views | By Mint2Save

Normally, any insurance plan gives you money (sum assured + Bonus accrued till claim date) when a claim is made due to maturity of the policy or on account of death of insured before the maturity of the policy (death claim). In fact, the money received as claim does contain of portion of the money paid to the insurer (Insurance company) in form of premiums paid on regular stipulated basis. It should clearly be borne in the mind the insurance premiums are always paid in advance for the period to be covered on annual basis from the date of issue of the policy. The payment of premium on monthly or quarterly or half yearly basis are fraction of the annual premium charged in instalments per the choice/ convenience of the policy holder. That`s why if pre-maturity claim is made before the advent of date of annual premium due (the next premium due, annually i.e. the corresponding date and month of commencement of the policy. Suppose, your risk cover under an insurance plan with 30 years of term, began since 12 the day of the month June of 1990 then, every year till 12/06/2019, every year 12/06 is taken as date and month of commencement of the next 12 months for consideration of insurance cover for which the premium worked out its payment on annual or half yearly or quarterly or monthly basis) is deducted from the claim amount.

But, in the era of maximum gain for minimum investment prevailing in each of the investor`s mind, the pattern of life insurance plan assuring payment of sum assured + bonus on maturity or a pre-mature death claim, is losing its luster and acceptability amongst insurance seekers who feels /questions the accountability / value of the maturity amount received after payment of hard earned money (in the form of premium).

The advent / induction of term plan insurance has quenched the hunger of investor who wishes for a high amount of insurance cover against the payment of a very low amount as premium and that too, enjoys the exemption under section 80 C of income-tax on one hand and, avenues for investment in more profitable schemes that fits in to and cater his future needs( like child education, marriage and, owning a house, income after retirement and provision medical assistance etc.).

By paying a very low amount like Rs.6500/- annually for an insurance cover of Rs.1000000/-(ten lakhs) under a term insurance plan. The term insurance plan can be made more effective, secure and need worthy by paying a little extra / additional premium for following extra benefits:-

1. Accidental rider- Normally, the term insurance plan covers claim arising on account of death of insured for  natural death. But, by opting for payment of some little of additional premium one can get extra benefit (up to 50% more) if death of insured is caused by an accident.
2. Critical Illness rider- should be opted for and can be had by payment of a meagre amount additionally, to cover the hazards of critical illness requiring a huge amount to be spent for treatment of any critical illness of the insured.
3. Premium wavier rider- should opted for by the insured for waiver of premium to counter the circumstances leading to inability to make further payment of premiums of term plan due to any one or the other reason under un-avoidable conditions. This will enable the insured to enjoy the advantages of term plan insurance cover until the maturity without making further payment of premiums. This too, can be had by paying a little sum as additional premium.
4. Income benefit rider- By paying a little of extra premium, an insured can enjoy the benefit of receiving sum money on regular basis in case he becomes unable to earn money due disability or something like wise.

Any one of the the riders mentioned to as above, can be taken in single entity or clubbing two or more (even all) by paying additionally for any one and/or two and/ or three and/ or all the four.