1. Critical Illness Rider
This rider will pay a fixed amount of money if you are diagnosed with a serious illness listed in the policy document. This money can be used to cover all additional expenses you and your family will have to bear as a result of the disease. Further, the money will also act as a replacement for the income you might have lost - because of the diagnosis and treatment of the disease.
You should be super careful about the ‘type’ of critical illness rider available with the policy you’re going to purchase. Some insurers offer accelerated riders, while some offer comprehensive riders.
a. Accelerated Critical Illness Rider
If you use an accelerated rider, it will simply pay you an advance amount out of your total base cover. If you use the rider for a certain amount, your base policy cover will be reduced by that amount.
b. Comprehensive Critical Illness Rider
Unlike an accelerated rider, a comprehensive rider will not affect your base policy cover at all. It will offer a payout if you’re diagnosed with an illness mentioned in the policy and in the event of your death, your family will receive the full amount for which you bought the term insurance policy.
Let us understand both these types of critical illness riders better with the help of an example. Suppose you have a term insurance policy of Rs. 1 Crore and you purchase a critical illness rider of Rs. 10 Lakhs along with it.
If you buy an accelerated rider
you’ll be paid Rs. 10 Lakhs if you get critically ill because of a disease listed in your policy document. And, your term insurance cover will be reduced by this amount. Then, in case anything happens to you during the policy term, your family will be paid a claim of Rs. INR 90 Lakhs only.
If you buy a comprehensive rider,
instead an amount of Rs. 10 Lakhs will be paid to you if you get diagnosed with a disease listed in the policy document. And if you pass away during the duration of the policy, your family will get a term insurance claim of Rs. 1 Crore.
2. Accidental Death Benefit Rider
If you pass away because of an accident during the policy term, this rider will provide your family with an additional sum of money. You should opt for the accidental death benefit rider only if you are not able to buy sufficient term cover for your family due to eligibility restrictions. Because when you do the math, you’ll realise there is no major cost difference between the Accidental death benefit rider and a term insurance policy of the same cover amount.
3. Accidental Disability Rider
This rider will pay an additional sum of money in case you meet with an accident that leads to disability. An accidental disability could impact your ability to earn and live a regular life. In fact, a disability can cost your family even more than your death. Because there will be a loss of earnings as well as an increase in expenses - there will be additional lifestyle costs like accessible property, vehicles, making alterations across the house, etc.
Accidental disability rider can offer protection against such a financial risk. If you’re buying this rider with your term plan, you should know that not all types of disabilities are covered by the accidental disability rider. It may cover only permanent and total disability.
4. Waiver Of Premium Rider
There are two types of waiver of premium riders available with a term insurance policy.
a. Waiver of Premium on Critical Illness Rider
With this rider, all your pending term insurance premiums will be waived off if you get diagnosed with a critical disease that is mentioned in your policy document.
b. Waiver of Premium on Accidental Disability Rider
If you get disabled due to an accident, you won’t have to pay any of your future premiums if you buy this rider with your term insurance policy.
5. Surgical Care Rider
This rider will offer a lump sum benefit, i.e., a fixed sum of money in case you are hospitalised for a minimum period of 24 hours for a surgery that is medically necessary. The benefit amount that you’ll get under this rider will depend upon whether the surgery is classified as ‘major surgery’ or ‘other surgery’ in the policy document.
6. Hospital Care Rider
If you undergo hospitalisation for treatment of an illness or injury that is medically necessary, the Hospital Care Rider will pay a fixed amount of cash on a daily basis for each day you are hospitalised. To avail the benefit under this rider, you are required to be admitted to the hospital for a minimum period of 48 hours.
For instance, you undergo a 5-day hospitalisation for treating kidney disease. If you’ve opted for this rider along with your term plan, the insurer will pay a specific amount, say Rs. 5000 for 5 days each, i.e., Rs. 25000 in total.