The COVID-19 pandemic shook the world and made everyone realise and review their priorities in some way or the other. Two waves of the pandemic have already wreaked havoc in India, with the possibility of the third wave looming large.[1] Over 30 million people have already contracted the virus in the country, out of which, almost 4 lakh lost their lives. The number is rising every day again and if the third wave strikes, the numbers could rise sharply given that over 2.5 million cases were being reported every day at the peak of the second wave in the country.[2]
These new uncertainties of life have once again underlined the need of having a financial cushion to fall back on, with many people realising the importance of having a term life insurance plan.[3]
Importance of Term Insurance
Everyone plans for a good future with a set of financial goals like buying a new house, going on exotic vacations, sending their children to the best schools and colleges, and building a corpus for stress-free retirement life. While all that is good, it is also equally important to have a backup plan to ensure that if something goes wrong on the way, these financial goals are not compromised, and more importantly, your family’s financial future is secure. A term insurance policy can go a long way to ensure that.
Simply put, term insurance is one of the simplest and one of the most cost-effective insurance policies that offer financial security to the policyholder’s family in case of his or her sudden death. It maybe considered important, especially for breadwinners of a family, as untimely death can put their family into a state of uncertainty. Under this policy, if the policyholder dies, his/her nominees receive the entire sum assured as death benefit. They could then use that money to meet their regular expenses, to repay existing liabilities or to fulfil other financial goals.
Enhancing Term Insurance through Riders
A basic term insurance policy is a great tool to protect one’s family financially in case of the untimely death of a breadwinner. However, some other uncertainties could also derail financial goals. It could be a case of the policyholder getting disabled in an accident or falling prey to a critical illness like cancer or a serious heart ailment. Such conditions may also put the family in a similar financial distress due to loss of income or steep medical bills. And it’s not like these circumstances are uncommon. As per Indian Council of Medical Research (ICMR), on average over 17 lakh new cases of cancer are reported in India in a year. The cases of heart related ailments are also rising in the country.[3]
In such situations, simply having a term insurance plan may not be enough. To deal with such situations effectively, you can customise your term insurance policy by opting for certain additional riders, also called add-ons at nominal extra cost, to protect your loved ones from financial hurdles arising out of such risks.
Which Riders Can You Avail?
There are different riders that you can choose from to enhance your term insurance benefits. The most common riders available with a term plan are: Critical Illness Benefit Rider, Accidental Death Benefit Rider, Accidental Permanent Total/Partial Disability Rider and Waiver of Premium Benefit Rider.
Critical Illness Rider –
As the name suggests, the Critical Illness Rider offers protection against major critical illnesses and pays out a lump sum amount if the policyholder is diagnosed with any of the listed critical illnesses. It does not matter if the policyholder survives the condition, the pay-out is assured on diagnosis of any listed illness which usually include heart diseases, major organ transplant, stroke, and cancer, among others.
Accidental Death Benefit Rider -
Accidental Death Benefit Rider provides an additional sum (over and above the base policy) to the nominee if the policyholder loses his or her life due to an accident. For example, if the policyholder opted for a basic sum assured of Rs 1 crore and an accidental death benefit rider of Rs 25 lakh, the total claim amount will be Rs 1.25 crore if the death occurs due to an accident.
Accidental Permanent Total/Partial Disability Rider -
If the policyholder is left totally or partially disabled in an accident, thereby limiting his/her capability and capacity to earn livelihood, Accidental Permanent Total/Partial Disability Benefit Rider can provide immediate financial aid, if added to the base policy.
Waiver of Premium Benefit Rider -
In case of Waiver of Premium Rider, all future premium payments payable under the life insurance policy are waived in case of any of the covered situations and the policy continues to provide life cover for the rest of the term.
Where to Get a Term Insurance Policy?
If you are looking for a term insurance plan that suits your needs, you may considerBajaj Allianz LifeSmart Protect Goal - A Non-Linked, Non-Participating, Pure Life Term Insurance Plan that provides a Rs 1 crore cover at Rs 21 per day. [4]. Moreover, theplan offers you the choice of a range of add-on covers that you can use to customise your life insurance. You can opt for waiver of premium benefit, accidental death benefit or accidental total permanent disability benefit. Moreover, its critical Illness benefit option covers 55 listed illnesses.[5]
The plan also comes in multiple variants to serve even more specific needs of the policyholders. One can choose its Child Education Extra Cover[5] variant, which provides extra protection for a child’s education expenses in case of death of the policyholder, or Joint Life Cover variant[5] in which you can add your spouse in the same policy. Bajaj Allianz Life Smart Protect Goal - A Non-Linked, Non-Participating, Pure Life Term Insurance Plan also comes in the Increasing Life Cover variant where life insurance cover increases at every policy anniversary[5].
Adding riders to the base term insurance policy protects you and your family from financial stress against a range of uncertain events. A wide range of scenarios gets covered under each rider and each of them serves a particular purpose. So do not settle for a policy before you understand its benefits along with terms and conditions. After all, you won’t want to take chances with your family’s financial future.
References –
[4] Above illustration is considering Male aged 25 years | Non-Smoker | Life Cover Variant | Policy term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Non-medical rates | Annual Premium Payment Mode | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only.
[5] Product feature/benefit mentioned above are dependent on variant
BJAZ-WEB-ECNF-01333/21