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Are Add-ons and Optional Features of Term Insurance Really Beneficial?

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Are Add-ons and Optional Features of Term Insurance Really Beneficial?
December 30, 2022

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Everybody understands the importance of having term insurance. The plan provides financial stability when your loved ones need it most. Many young individuals purchase term plans without thinking about the benefits or riders. In fact, most people only compare the sum assured and premiums before buying their term policy. Let’s understand the add-ons and optional features and whether they benefit policyholders.

What Are Add-Ons in Term Insurance?

Add-ons in term insurance provide you and your beneficiary with something over and above the basic sum assured amount. Typically, the benefit could be a payout on an event other than the policyholder’s death or an additional payout due to the circumstances that took the policyholder’s life. Almost every term insurer offers the following add-ons with their term plans:

  • Accidental Death or Disability Benefit

    An accident could become fatal or lead to disability. In these situations, the rider provides an additional payout to help you and your loved ones deal with the difficult situation.

  • Critical Illness Benefit

    Life-threatening illnesses like heart attacks and cancer often have long and expensive roads to recovery. The benefit covers a number of specific critical illnesses. In case you get diagnosed with one of them, the add-on offers a payout. You can use the money received to pay for your treatment or replace your family’s lost income.

  • Waiver of Premium Rider

    The rider waives off future premiums in case of a critical illness diagnosis or after an accident leads to disability. Policyholders no longer have to pay the regular premium but the plan remains active ensuring the beneficiary still receives the sum assured payout.

Why Should I Purchase Add-ons with My Term Plan?

All riders or add-ons come at a cost that gets added to your premium amount. You may wonder whether the additional cost is worth it. Let’s see some reasons why you should opt for add-ons with your policy:

  • It’s Cost Effective

    Add-ons provide benefits that other policies may provide at affordable prices. You can opt for critical illness coverage or accidental disability coverage for the fraction of the cost of a new plan.

  • No Need for Additional Medical Checks

    When you purchase a term plan, you may have to undergo a few medical tests. You do not require additional tests when you purchase a rider with your policy. However, if you hope to purchase a stand-alone critical illness cover, you could have to pay for extra tests.

  • Some Benefits Are Unavailable

    You cannot get the benefits from riders like the waiver of premiums or accidental death with any other policy. These benefits work solely with your term plan and provide enhanced financial coverage when you require it most.

Should I Purchase Every Add-On or Optional Feature?

While add-ons provide numerous benefits, you must choose wisely. People with high-risk jobs, like pilots or miners, benefit the most from choosing an accidental death and disability rider with their plan. Individuals who travel often will also benefit from it. However, those who work from home or do not undertake any activities that could cause a fatal accident can skip paying for the rider. While selecting add-ons, you must find what works for your lifestyle and financial requirements.

Add-ons and optional features can make your term plan even better. Ensure you check the riders available and select the ones you need before paying your premium. If possible, term life insurance plan and riders when you’re young and healthy so you can get the maximum benefits at a minimal cost.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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