Term plans are pure protection plans that enable an earning individual to ensure financial security for their dependants in the unfortunate case that the individual is not alive to provide for them.

Term plans only cater to the condition of the life insured ‘not being alive’ and therefore not being able to provide for the family.

However, there can be other unfortunate situations in life wherein a person, though alive, is unable to provide for their family. For example, this could be because of a severe illness that prevents the individual from working. Or maybe a disability caused due to an accident.

In such cases, it is likely that the individual is unable to pay the premiums for their life insurance plan and hence the plan lapses and its benefits are lost.

To stay prepared and protected against such villainies of life, one needs to have a more comprehensive protection plan in place.

And this is where ‘Riders’ come to the rescue. ‘Riders’ are like plug-ins that can be opted for to enhance the protection aspect of the base life insurance plan. Most life insurance companies offer rider options with their plans. However, one must be sure about what riders to opt for, as each rider comes at an additional cost.

There are different kinds of riders offered by life insurance companies which can enhance the efficacy of a term plan:

Accidental Death Benefit Rider: If this rider is opted for, then in case of death of the life insured due to an accident, an additional amount, which is the rider benefit, is paid in addition to the death benefit of the base plan. For example, if the death benefit of the base plan is Rs.25 lakhs and the benefit of the attached ADB rider is Rs.15 lakhs, a total of Rs.40 lakhs will be paid out to the beneficiary if the life insured dies due to an accident. Losing a loved one in an accident involves much emotional trauma for loved ones. The additional financial support offered by the ADB rider can at least help ease the practical difficulties of life.

Accidental Disability Benefit Rider: If opted for, this rider gets triggered if the life insured has an accident resulting in a disability. This disability might be temporary or permanent. And if permanent, it might be total or partial.

A temporary disability is when the individual cannot work for a certain period. Partial Permanent disability is when the disability is permanent but not wholly ruinous—for example, loss of one limb, loss of sight in one eye, etc. Total Permanent disability is an irrecoverable condition because of which the individual is unable to independently manage even daily tasks like going to the toilet, changing clothes, eating food, moving around the house, etc. In such a situation, it is impossible for the individual to be employed in the same capacity as before the accident, affecting their earning capability.

Different companies offer different riders under this segment. Some riders cover all kinds of disability, and others cover only total and permanent disability. The benefit payout for different disability conditions also varies from rider to rider.

Waiver of Premium Rider: This rider is usually linked to one of the two eventualities – disability or diagnosis of critical illness of the life insured. On the occurrence of the particular condition that the rider covers, the benefit gets triggered. For example, suppose a policyholder has opted for Waiver of Premium for Critical Illness Rider with the base term plan. If the policyholder is diagnosed with a critical illness covered under the rider during the policy term, they would not have to pay any future premiums for the insurance plan. The plan will remain active for the remaining term and all benefits, if and when applicable, will be paid. Continuing with the above example, if, after being diagnosed with a critical illness, the policyholder dies during the policy term, the death benefit under the base plan will be paid to the beneficiary.

Critical Illness Benefit Rider: This rider covers the eventuality of the life insured being diagnosed with a critical illness. The list of critical illnesses covered under the rider varies from company to company. A lump sum benefit is paid out to the life insured if the rider gets triggered, which helps meet treatment expenses and any loss of income caused due to the illness.

Income Benefit Rider: As the name suggests, this rider provides a regular income for a specific period to the family in the event of the death of the life insured during the policy term. This rider benefit is paid in addition to the lump sum death benefit of the base plan. It thus helps make up to some extent for the loss of income and ensures better financial stability for the family.

Riders are an affordable and convenient means of making your life insurance coverage more robust and extensive. However, just as term insurance plans vary from company to company in terms of the features, benefits, pricing, terms and conditions, etc., so is the case with riders. Therefore, it is essential first to understand the benefits and other details of the rider/s that can be availed with a particular plan and then make an informed decision.