The COVID-19 pandemic has shown us the importance of financial planning for ourselves and our family. It’s essential to have some sort of financial security for your family or dependents in the event of your death. A term life insurance is one of the most basic and vital ways to provide a financial shield to your dependents in case of any unfortunate circumstance.
However, sometimes, a term plan may not be sufficient for your financial needs. For a more comprehensive plan, you can choose to add specific riders that suit you the best. Riders provide you with additional benefits along with the basic coverage amount. These additional benefits can be availed in case of various unforeseen circumstances like accidents, disabilities (permanent or temporary), critical illnesses, terminal illnesses, etc. Adding a rider will increase your premium amount. Accidental death benefit is one such rider.
This rider can be inbuilt with your insurance policy, or you can add it to your basic policy. If you choose to add a rider to your basic policy, you will have to pay an extra amount along with your basic premium amount. Usually, this extra amount is nominal. The total premium amount can be changed later if you decide to surrender the accidental death benefits.
How Accidental death Benefit Riders help to increase the coverage
Opting for an Accidental Death Benefit Rider provides your family with an increased coverage in the event of your death. This rider will be helpful if the cause of death is accidental, like a road, plane or industrial accident. The amount of the additional benefit is decided by the policyholder at the time of buying the policy. It is usually the same as the basic insurance coverage. This comes at a slightly extra cost and the premium value increases. Therefore, in case of an accidental death, the family would receive twice the coverage amount.
An accidental death is defined as death resulting from a physical injury that was caused by an external and violent accident. The death should have occurred within 180 days of the day of the accident, and should be independent of any other factors like any pre-existing health conditions. If these conditions are not met, the insurance company has the right to deny the additional benefits to the family.
Certain circumstances leading to death are usually excluded from this rider. If the death is caused by war events, partaking in any illegal activities, indulging in dangerous hobbies like skydiving, or due to self-inflicted hazards, the dependents cannot avail the benefits under this rider. Additionally, there might be certain restrictions with respect to the age of the policyholder. The rider might not apply if the insured is of 75 years of age or more. Also, one cannot purchase this rider after reaching the age of 65.
Benefits of an Accidental Death Benefit Rider
An accidental death is a tremendous and irreversible loss for a family. It is unexpected and devastating. Apart from the grief, the family also has to deal with financial stress due to loss of income. If the insured was hospitalised, they also have to worry about paying the medical expenses which can be significantly high. In such difficult times, having sufficient insurance coverage which comes through on time can be a source of enormous relief for the family.
The importance of the accidental death benefit rider is apparent. It provides a huge benefit at a nominal extra cost. This amount can be received by the family as a lump sum, or as monthly instalments for a fixed time period. A part of it may also be received as a lump sum, and the rest can be received monthly. The coverage provides the family with a monthly income for their sustenance, and settle any affairs after the death of the insured. The family can use the time to recover from the loss of a family member and figure out different means of income.
Top 5 Term Plans with an in-built ADB rider with features and details
There are several insurance companies that offer term plans with inbuilt ADB rider, so that you don’t have to opt for the rider separately. Such plans can be very convenient as you can avoid the hassle of comparing insurance policies and then add-on riders specifically.
| Plan Name | Min & Max entry age | ADB coverage offered | Claim Settlement Ratio |
|---|---|---|---|
| Bajaj Allianz Smart Protect Goal | Minimum entry age: 18 Maximum entry age: 65 | 100% of the basic sum assured (no limit) | 98% |
| HDFC Life C2PP Life Option | Minimum entry age: 18 Maximum entry age: 65 | 100% of the basic sum assured (no limit) | 99% |
| Max Life Insurance Smart Term Plan | Minimum entry age: 18 Maximum entry age: 65 | Upto 100% of the basic sum assured | 99.2% |
| ICICI Prudential iProtect Smart | Minimum entry age: 18 Maximum entry age: 65 | Upto 100% of the basic sum assured | 97.8% |
| Pnb MetLife Mera Term Plan Plus | Minimum entry age: 18 Maximum entry age: 65 | Upto 100% of the basic sum assured | 97.2% |
Who Should Buy Term plan with in-built ADB rider
An accidental death benefit rider is useful for everyone as accidents can happen to anyone regardless of their profession. However, there are some factors which might increase the risk of an accident, in which case getting an ADB rider is of even more importance. People whose work or lifestyles involve considerable risk should consider getting a term plan with an inbuilt ADB rider. A person who works in a potentially hazardous environment, like in a factory, or deals with heavy machinery in his day to day life can get a term plan with ADB rider. Similarly, if a person drives more than the average man, it might be a good idea to opt for an ADB rider.
