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What are Term Insurance Riders? - Meaning, Types and Benefits

March 19, 2019
While choosing a term insurance cover, one of the most important factors is to choose an insurer who has a high claim settlement ration. Claim settlement ratio is the figurative average of the claims processed by an insurance company in any given financial year and of represented by a percentage value. Higher the claim settlement ration, high is the probability of getting your claim processed if need be, without any hassles and other issues. For the benefit and convenience of customers, IRDA (Insurance Regulatory and Development Authority) of India had made it mandatory for the potential buyers to calculate and consider the claim settlement ratio. Claim settlement ratio is the ratio of the number of claims received by an insurer and the number of claims settled by the insurer. Claim settlement ratio has been chosen to rate the insurance companies because it is the only ratio which could be of use to customers while they select the policy. High claim settlement ratio shows the insurer is reliable and could be trusted for taking term plans whereas the low ratio indicates that the credibility of insurer is less and therefore they won't attract many customers because of their inability to settle claims.

Following are the important six riders for term insurance with their relevant benefits:

  1. Accidental Death benefit:

    This is a rider that comes with a clause of lump-sum payment of the sum assured to the nominee(s) in the event of the policy holder's demise due to an accidental reason.
  2. Accidental disability rider:

    This is a very important rider that comes with the clause of financial protection coverage in the event of any kind of disability due to an accidental reason. The offered protection is directly in line with the added premium terms and therefore, must be chosen as per the actual requirement and not randomly.
  3. Critical illness rider:

    This is an additional clause that offers extra coverage in lieu of the added premium terms and accompanying payment options. This clause offers complete financial coverage against the probability of any critical illness. This rider, like other riders, comes as an additional benefit to the main plan benefits i.e. the main plan benefits. Therefore, in essence, what this means is that in return for an increased premium due, coverage against the occurrence of any pre-defined and listed critical illness is duly offered.
  4. Accelerated death benefit rider:

    This is an additional feature that comes as an extra rider and entitles a policy holder or her/his nominee(s) to receive additional benefits (apart from the main plan benefits) in the event of the policy holder's demise due to any specified and pre-defined reason.
  5. Income rider:

    This is the rider that entitles the policy holder's nominee(s) to receive a particular sum as a fixed income in the event of the policy holder's demise during the plan term.
  6. Waiver of premium:

    This is a very beneficial rider that is often added to certain plans, especially a child plan. This rider states that there will be no payable premiums in the event of the policy holder's demise and that her/his nominee(s) will be entitled to the main plan benefits.

HDFC Life offers several term insurance plans that seek to secure your family's future at all times and during all stages of life. For details, click on the mentioned link: https://www.hdfclife.com/term-insurance-plans.



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