Term insurance can be the strongest financial support system in a time of need. Anyone who wants to create a stable future must understand its significance. This small investment in your dependents' future financial security will shield them from the burden of paying off the liabilities, achieve life goals, and a variety of other expenses.
You might be aware of the fundamental purpose of term insurance, i.e., providing long-term financial security to you and your family. However, there’s more to your term insurance plan than meets the eye. Some valuable benefits of term insurance may not be known to you, and you may miss out on them.
In order to find the best term plan, you must b well-informed and updated. Let’s take a closer look at some of the uncommon benefits of term insurance:
- Critical Illness Benefit
Cancer, kidney failure, heart attacks, major surgery, and paralysis are some life-threatening diseases that can be very expensive to treat. In the event of such a medical emergency, a critical illness rider will help you avoid a massive financial burden.
The critical illness rider can be added to your term insurance policy for an extra premium. The diseases covered under the rider may differ from one insurer to the next. Hence, make sure to read what is term insurance exclusions and inclusions in the policy document thoroughly. You will be entitled to a lump sum or annual payments if you are diagnosed with a specified serious illness within the policy term.
- Waiver of Premium Benefit
If you are diagnosed with a serious condition or become disabled due to an injury, this term insurance rider can relieve your financial troubles caused by it. In some situations, the injury can also result in the loss of your income source. If you are unable to continue working, you will be unable to pay future term insurance premiums.
Is this, however, a reason to cancel your term insurance? The premium rider waiver ensures that this is not your last resort. A waiver of premium benefit can be attached as a rider to your term insurance contract, which would mean that in such circumstances, the insurance provider would not expect you to pay premiums to continue the plan.
You should add the rider to your term insurance policy when you purchase it to prevent a policy lapse in this situation. This has no impact on your coverage, and you will remain financially secure.
- Disability Cover
A person may become permanent or partially disabled as a result of an accident. This can lead to the loss of an income source as well as significant medical expenses. When purchasing term insurance, you can add a permanent or partial disability rider to get a comprehensive cover. It protects you from unforeseeable events like this and substitutes your income stream to help you get back on your feet financially.
- Increasing Life Cover
Increasing life cover comes with a term insurance plan in which the total sum assured, chosen at the start of the policy, increases by a fixed amount per year. The premium rate may or may not remain constant throughout the policy period. Notably, the amount of coverage provided by the plan is determined by the health of the insured at the time of purchase. Inflation and other life changes are usually taken into account when underwriting for increasing term insurance.
- Accidental Death Benefit
Unexpected incidents happen in life, and they can put you in a financial bind. Between the last few years, the fatalities and injuries due to road accidents increase considerably, the share of traffic accidental deaths jumping to 43.9% in 2019. In such a scenario, it is important to plan ahead of time for emergencies in order to minimise the financial burden on you and your family.
A typical term insurance plan provides a simple death benefit that may or may not cover all possibilities. An accidental death rider provides additional benefits to the policyholder's dependents in the event of the policyholder's untimely death due to an accident. It provides an additional layer of financial stability in the event of a financial emergency. This can be an excellent addition to your term insurance because accidents can leave a family in financial distress.
- Return of Premium Benefit
If you are looking for the best term plan for your financial well-being, the return of premium benefit may be a favourable option. With this benefit, you are entitled to receive all premiums charged during the policy term upon surviving the policy term.
Upon the untimely demise of the insured person, regular term insurance pays the death benefit to the nominee of the policy. Aside from the sum assured, there are no other payments. However, if the insured lives to the end of the insurance term, they will receive a refund of all premiums charged during the policy period.
Make sure to compare different policies to find the best term plan for your loved ones’ future. A careful decision today will lead to a healthy financial life in the coming years.
Mithilesh Singh is a digital marketing consultant, blogger, and founder of the Indian News Portal. He loves to assist freelancers, start-ups, and small businesses to use their website and products to drive more leads, traffic, and sales for enhanced revenue and growth.