A term insurance plan is an indispensable part of any effective investment portfolio. If you are searching for the term plan meaning, then read on.
A term plan is a pure life insurance policy that secures the economic future of the policyholder’s family in the case of his or her death. It provides life insurance cover for a specific duration and at a fixed premium throughout the policy tenure. Another highlight of a term plan is that you can purchase riders at a nominal cost, which is beside the basic premium. Riders can widen the scope of your coverage by providing you with extra protection.
Types of term insurance riders and their benefits
Here is a list of some well-known riders that you should know about:
- Accidental death rider
If the policyholder loses his life due to an accident within the tenure of the policy, then this rider ensures that his or her nominees get an additional sum assured over and above the life cover. For instance, if you have a term plan with a life cover of INR 1 crore and have taken an accidental death rider worth INR 20 lakh, your nominees with receive INR 1.20 crore (INR 1 crore + INR 20 lakh) if the unfortunate event happens due to an accident. It is advisable to invest in this rider, if you travel a lot due to work or if your job demands working in dangerous conditions.
- Terminal illness rider
Terminal illness rider, which is also known as accelerated death benefit rider, can be beneficial for policyholder’s family if he or she is suffering from any terminal illness. In this rider, if the policyholder is diagnosed with any terminal illness within the policy period, the nominees receive a part of the life cover in advance to meet the medical costs. As the cost of hospitalization and medication is increasing day-by-day, such an amount can come in handy for the family. With this rider in place, there is no need to worry about arranging finances from other sources or taking a loan to meet the expenses related to medical treatment.
- Income benefit rider
The primary role of this rider is to help your family generate income during your untimely absence. In the case of the policyholder’s demise within the plan’s duration, the nominees will receive a supplementary sum for five to ten years along with the pre-decided sum assured.
- Waiver of premium rider
This rider protects you from paying the insurance premium if you lose your source of livelihood or are not in the position to earn due to a disability. With this rider, you can get value for money, as you remain insured without paying a premium until the policy expires.
- Critical illness rider
If the policyholder is diagnosed with a critical ailment, which is already specified in the terms of the policy, then he or she receives a substantial lump sum for the treatment. This rider covers illnesses like stroke, cancer, heart attack, and kidney failure among others. It is recommended that you check with your insurer about the list of illnesses covered before buying this rider.
It is essential to invest in term insurance and the riders needed as per your requirements. It will prove useful, as you and your family can remain protected from financial uncertainties that can arise due to an illness or an untoward incident.
You can buy term plan online to get the best deals on the premium. If you wish to ease the daunting task of selecting an ideal plan, you can use a term plan calculator. It will assist you in determining the premium needed for a particular sum assured in quick time. This makes a term plan calculator a time-saving tool. Riders come with many benefits. So, it is necessary to know about their various aspects before applying for one.