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Term life Insurance

What is a Family Income Benefit rider?

“With the changing times filled with growing uncertainties, it has become very important to have a suitable protection plan in the form of a life insurance policy.”

And the insurance policy should not mean only for you but also for your family to handle their various requirements at different stages of life in your absence.

What is a Family Income Benefit rider?

Term Life insurance is one such life insurance product that is affordable and offers substantial insurance coverage, securing your family’s future when you are not with them. It can be customised according to your needs such as you can select the sum assured, policy tenure as well as various riders.

Talking about Term life insurance riders – these are extra benefits that enhance your existing policy coverage and can be easily added to your primary policy by paying a nominal fee. However, the terms and conditions for the riders vary from one insurance provider to another. The rider might get lapse once the claim for the rider benefit being made, but the base policy will continue with the life cover.

In a general term insurance policy, the sum assured amount is paid to the beneficiaries at one go as a lump-sum payment. However, many times policyholders might have a concern about whether their family members will be able to handle such a substantial lump-sum amount or not. And thus, they might opt for a family income rider that offers additional monetary benefit every month.

“A family income benefit rider is one such useful rider wherein the nominees of the policy get monthly income as equal to policyholder’s monthly income. This term life insurance rider fulfils the gap of monthly income happened due to the demise of the earning member of the family.”

The benefit amount is an additional amount to the death benefit that passed to the beneficiaries only after the death of the policyholder. The policyholder can make the distribution plan of the rider benefit amount, such as the number of months that the insured person would want his family to receive the monthly income. As the policyholder age, the number of years for which his or her dependents will be eligible to receive the rider payout decrease and ultimately gets diminished.

What is a Family Income Benefit rider? 1

How does Family Income Benefit Rider work?

Supposedly a policyholder purchase 30-year policy worth Rs 50 lakhs along with the family income rider. After 10 years, the insured person dies. At that time, his death benefit gets activated, and the nominee of the policy will start receiving a regular monthly payment for the next 20 years. The monthly payment is generally 1 percent of the death benefit amount of the insurance policy and additionally, at the end of the 30-year term, the nominee would also receive the sum assured amount that is Rs 50 lakhs.

Now let’s understand the importance of family income benefit rider and why one should think about including it in his or her term life insurance.

Why should you opt for Family Income Benefit rider?

  • If you are the sole bread earner in the family, then this term life insurance rider can offer a steady income every income to your family in your absence.
  • If you want that your family should get monthly funds to manage their daily expense when you are not with them, then this rider is the ideal option.
  • If you think that the selected nominee cannot handle the lump sum insurance amount, then this rider can help to achieve those objectives.

Summing up the concept of family income benefit rider, we see that this term life insurance rider takes care of both long-term financial goals as well as the regular monthly expense of the dependents of the policyholder in his or her absence. It’s a good alternate for consistent monthly income for about 5 to 10 years in case it gets stopped due to the demise of the policyholder.

However, as advised by the experts, one should always opt for term insurance riders depending on their needs and requirement. Also, while opting for a rider, it is imperative to go through its terms and conditions to avoid hassle at a later stage. If you are also planning to include any rider in your term life insurance policy, then you can visit BimaKaro.in and get all information about the same. You can even speak to our insurance experts for better understanding by requesting a call back on the website.

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FAQs: Family Income Benefit Rider

  • What is a family income benefit rider?

    A family income benefit rider offers equal monthly income as the policyholder’s income to the policy nominee, fulfilling the loss of income due to the sudden demise of the insured person or earning member of the family. The policyholders can distribute the rider benefit amount in terms of the number of months that their family will receive as a monthly income.

    Review Overview
    How does Family Income Benefit Rider work?
    SUMMARY

    Supposedly a policyholder purchase 30-year policy worth Rs 50 lakhs along with the family income rider. After 10 years, the insured person dies. At that time, his death benefit gets activated, and the nominee of the policy will start receiving a regular monthly payment for the next 20 years. The monthly payment is generally 1 percent of the death benefit amount of the insurance policy and additionally, at the end of the 30-year term, the nominee would also receive the sum assured amount that is Rs 50 lakhs.

    5.0

  • How does Family Income Benefit Rider work?

    Let’s understand with the help of an example. A person has bought a policy worth Rs 50 lakhs with 20 years term. And supposedly, after 10 years, the policyholder dies. At that time, the death benefit amount will be given to the policy nominee as a regular monthly income for the next 10 years. The monthly payment is usually 1 percent of the death benefit amount, and additionally, at the end of 20 years tenure, the policy nominee will receive the total sum assured amount.

    Review Overview
    How does Family Income Benefit Rider work?
    SUMMARY

    Supposedly a policyholder purchase 30-year policy worth Rs 50 lakhs along with the family income rider. After 10 years, the insured person dies. At that time, his death benefit gets activated, and the nominee of the policy will start receiving a regular monthly payment for the next 20 years. The monthly payment is generally 1 percent of the death benefit amount of the insurance policy and additionally, at the end of the 30-year term, the nominee would also receive the sum assured amount that is Rs 50 lakhs.

    5.0

  • What is the importance of a Family Income Benefit Rider?

    Family Income Benefit rider provides a regular income to the insured’s family in case of his or her sudden demise so that they can manage their daily expense. Also, it is beneficial for those policy nominees who cannot handle lump-sum death benefit amount.

    Review Overview
    How does Family Income Benefit Rider work?
    SUMMARY

    Supposedly a policyholder purchase 30-year policy worth Rs 50 lakhs along with the family income rider. After 10 years, the insured person dies. At that time, his death benefit gets activated, and the nominee of the policy will start receiving a regular monthly payment for the next 20 years. The monthly payment is generally 1 percent of the death benefit amount of the insurance policy and additionally, at the end of the 30-year term, the nominee would also receive the sum assured amount that is Rs 50 lakhs.

    5.0

  • Why should you buy a Family Income Benefit Rider?

    If you are the sole earner in your family, then in your absence, your family may suffer due to loss of income. In such a case, a Family Income Benefit rider offers a regular income to your loved ones after your demise, enabling them to lead a comfortable and stress-free life.

    Review Overview
    How does Family Income Benefit Rider work?
    SUMMARY

    Supposedly a policyholder purchase 30-year policy worth Rs 50 lakhs along with the family income rider. After 10 years, the insured person dies. At that time, his death benefit gets activated, and the nominee of the policy will start receiving a regular monthly payment for the next 20 years. The monthly payment is generally 1 percent of the death benefit amount of the insurance policy and additionally, at the end of the 30-year term, the nominee would also receive the sum assured amount that is Rs 50 lakhs.

    5.0

  • What are the riders?

    Riders are the extra benefits that enhance the scope of life insurance policy coverage. A policyholder can add a rider while buying an insurance policy. There are various riders available in the market; the most popular ones are critical illness benefit rider, accidental death benefit rider, waive of premium, family income benefit rider, amongst others.

    Review Overview
    How does Family Income Benefit Rider work?
    SUMMARY

    Supposedly a policyholder purchase 30-year policy worth Rs 50 lakhs along with the family income rider. After 10 years, the insured person dies. At that time, his death benefit gets activated, and the nominee of the policy will start receiving a regular monthly payment for the next 20 years. The monthly payment is generally 1 percent of the death benefit amount of the insurance policy and additionally, at the end of the 30-year term, the nominee would also receive the sum assured amount that is Rs 50 lakhs.

    5.0

  • Review Overview
    How does Family Income Benefit Rider work?
    SUMMARY

    Supposedly a policyholder purchase 30-year policy worth Rs 50 lakhs along with the family income rider. After 10 years, the insured person dies. At that time, his death benefit gets activated, and the nominee of the policy will start receiving a regular monthly payment for the next 20 years. The monthly payment is generally 1 percent of the death benefit amount of the insurance policy and additionally, at the end of the 30-year term, the nominee would also receive the sum assured amount that is Rs 50 lakhs.

    5.0

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