Term Insurance: Life insurance remains one of the most important financial planning tools for every individual who has dependent family members. Hence, it becomes important to invest in a life insurance plan sensibly, after doing intense research on various aspects and keeping various scenarios in mind.
The most valuable product under life insurance is Term Insurance. Term Insurance is among some of the best and most cost-effective investment modes to financially secure the future of your loved ones, in terms of these uncertainties.
The product comes minus the benefits of investment, maturity and surrender value, and the only advantage being death benefit that dependents of the insured receive upon the death of the policyholder. As per the policy conditions, the entire sum assured is paid out to the nominee/beneficiaries in case of the sudden death of the policyholder within the policy term that maybe 20, 30, 40 or more years.
Benefits of Term Insurance:
- Get lump sum amount in the event sudden death.
- See off all your loans and liabilities.
- Provide money so that your family continues to live with pride.
- Takes care of your family in case of your disability or critical illness.
- Provides Supplementary income in case of loss of income due to accidental disability or illness.
- Get lump sum amount if diagnosed with a critical illness.
- Additional sum insured in case of accidental death.
Term Insurance: Accidental Death Benefit Rider
People involved in a profession that involves great risk or a profession that involves too much driving must make their term plan much more comprehensive by adding Accidental Death Benefit rider to it. Accidental Death Rider is one of the common riders provided by most of the term insurance companies.
- By opting for this rider, a policyholder gets the extra amount in a lump sum or monthly income whichever way the policyholder thinks are best for the dependents.
- The premium of the accidental death benefit rider completely depends on the total sum assured. These riders typically end once the insured person reaches age 70.
- Apart from the Accidental Death Benefit Rider, another important rider in which one must be covered is accidental disability rider. In this cover, if the policyholder becomes disabled as a result of an accident, the insurer offers income to the diseased for a specific period according to the terms of the policy.
The policyholder can also choose to take benefit as a lump sum amount that can act as an income replacement benefit.
An accidental death benefit generally covers any death that occurs due to an accident. It typically excludes incidents like acts of war and death caused by illegal activities, etc. Hazardous hobbies, in which the insured regularly engage, are generally specifically excluded, as well. In the case of a fatal accident, death usually must occur within a period specified in the policy.