Accelerated Terminal Illness Benefit Rider

Accelerated Terminal Illness Benefit Rider is additional coverage that advances the payment of the death benefit payable under a base life insurance plan on the diagnosis of a listed terminal illness of the life assured. Usually, the rider benefit is payable when the chances of survival of the life assured is not more than 6 months due to the critical illness. Such riders are offered by most of life insurers, but check with your insurer before buying a life insurance plan.

Features of Accelerated Terminal Illness Benefit Rider

Following are some of the usually observed features of the Accelerated Terminal Illness Benefit Rider offered by different insurance providers - 

1. Entry Age - Individuals as young as 18 years can opt for this plan. Usually, the entry age for this rider benefit is limited to 70 years.
2. Premium Payment Term & Mode - The rider premium paying term corresponds to the base plan’s premium paying term. The rider premium can be paid as a single-payment or on a monthly, quarterly, semi-yearly, or yearly basis.
3. Critical Illnesses Covered - Usually, the rider provides the accelerated benefit on diagnosis of cancer, kidney failure, major organ transplant, paralysis, heart valve surgery, aorta surgery, major burns, and CABG.
4. Waiting Period - This rider plan generally comes with a waiting period of 90 days from the date of rider plan issuance. No claim is admissible during this period.
5. Sum Assured - The rider usually provides a minimum sum assured of INR 50 Lakh. There is no limit attached to the maximum sum assured, however, it is subjected to underwriting.

Benefits of Accelerated Terminal Illness Benefit Rider

A minimum of 50% of the sum assured of the base plan is payable as the accelerated terminal illness benefit under this rider on diagnosis of any of the listed critical illnesses. However, some insurers pay this benefit if the possibility of survival of the life assured due to the diagnosed terminal illness is for less than 6 months. The remaining sum assured is paid on the death of the life assured to the nominee.

How Accelerated Terminal Illness Benefit Rider Works?

Let’s understand the working of the Accelerated Terminal Illness Rider with the help of an example - 

1. Mr. Arora will receive an accelerated terminal illness benefit of INR 50 Lakh on the diagnosis of cancer, i.e, on September 01, 2020.
2. The remaining INR 50 Lakh will be paid to his nominee on the date of his death i.e. on December 01, 2020.

Accelerated Terminal Illness Benefit Rider Exclusions

Following are the common exclusions of an Accelerated Terminal Illness Rider - 

1. Critical illnesses diagnosed before the completion of the waiting period of 90 days from the date of rider plan issuance.
2. If the critical illness is caused due to a pre-existing disease of the life assured, no claim is honoured by the insurance company.
3. Any critical illness caused due to self-inflicted injuries or attempted suicide.
4. Diseases caused due to use of alcohol, drugs, or narcotics.
5. Conditions or diseases caused due to HIV/AIDS
6. Illnesses contracted in war, participation in military activities, or adventurous sports like hunting, racing, river rafting, mountaineering, bungee jumping, scuba diving, paragliding, etc.

Who Should Buy Accelerated Terminal Illness Benefit Rider?

The Accelerated Terminal Illness Rider is recommended for the following sets of people - 

1. Primary earning members of the family
2. People with a family history of chronic diseases
3. People working in environments exposed to high levels of pollution
4. People in senior management roles with stressful working life.