When you buy a term plan, you provide a basic protection cover to your family against any threat to your life; and the insurance company pays the sum assured to your nominee in the event of your death. But besides life, there are many other risks that loom over your family and threaten their future. This includes risks to your income and health. While it’s impossible to cover each of these risks, the good news is that you can cover some of the major ones through riders that can be attached to a term plan. By buying them, you widen the financial security net for your family.
The threat of income risks - Life cover provides the basic sum assured to your nominee in the event of your demise. But what if you are rendered incapacitated as a result of an accident or illness, and your earning capability is grossly hampered. Not only will your family have to undergo great hardship for your treatment, they will also have to manage the regular expenses. In such circumstances, life cover doesn’t help. Put simply, if you were to be incapacitated but alive, your family would need financial support in terms of replacement of your income, something which a life insurance policy would not offer.
Additional security net from riders - Many insurance companies offer various riders, which are tailor-made to cover specific kinds of risks. Once the eventuality covered by the rider occurs, the benefits are paid. The most important and common riders available with a term plan are - critical illness benefit, accidental death benefit, accidental disability benefit and waiver of premium. For instance, if you meet with an accident, the treatment and rehabilitation would involve huge costs, which can suck up all the savings of your family. The family member might even be forced to borrow.
Just in case even after all the treatment, they are not able to save you, the life cover may well fall short to cover your family’s regular living expenses and future life goals like child’s higher education. In the case of permanent disability, it might be very difficult for you to be gainfully employed and support your family financially. Again, your family will have to bear hardships. But with riders, such as accidental death benefit and disability benefit, your family gets an additional sum, say in the case of death due to an accident, and a steady stream of income for a long period, respectively.
An advantage of trigger-based payments - Unlike a regular health insurance plan which only reimburses or supports the treatment cost of the insured person, a rider—once triggered—gives a committed payout for the given conditions. This is helpful in the event of a disability or critical illness, where you not only need a lot of money for treatment, but also for taking care of the family expenses. Therefore, a benefit that pays you a large sum under few conditions through riders will immensely help your family cope up when in adverse conditions and ensure that the progress to their dreams is not irreparably damaged.
The nominal costs edge - We are aware that among various types of life insurance plans, term plans provide the highest life insurance coverage at the most affordable premiums. Riders further add to the advantage since they cover other risks at nominal costs. In effect, what this does is it ensures that a wide range of risks is covered, with you not having to dig deep into your pockets.
Calamity typically doesn’t strike with a warning. A wide risk coverage consisting of a life cover from a term plan and riders makes sure that you can reclaim your life after a disaster and the momentum in your journey to your dreams.
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First Published On : Mar 7, 2016 10:49 IST