What is Accidental Death Benefit Rider in Term Life Insurance?
Term Insurance is the purest form of life insurance that offers a sizeable insurance coverage amount (death benefit) to the dependents of the policyholder upon his or her demise within the policy tenure. Along with this death benefit amount, it also offers additional financial assistance in the form of Riders.
Term Insurance Rider is an optional but helpful tool which extends the benefits of the existing insurance coverage to other unforeseen situations like critical illness, accidental death, permanent and partial disability, etc. There are different kinds of riders available such as critical illness, disability rider and more that can be added to the base policy by paying a nominal charge over and above the premium amount at the time of purchasing term insurance policy.
What is Accidental Death Benefit Rider?
Among various riders, Accidental Death Benefit Rider is one such familiar rider that provides additional benefit against accidental death or disability. It can be added to the primary term insurance policy to secure the beneficiaries of the policy in case of accidental death. This is an important measure to consider while buying a term life insurance as accidents can’t be predicted and can leave the dependents in miserable conditions if sudden death occurs. Those who work in any kind of hazardous environment or who are into the profession of driving or commute daily should consider adding accidental death benefit rider in their term policy.
This term insurance rider works as a double indemnity rider, wherein a death by accident is compensated by both the sum assured of the insurance policy as well as the rider amount. It is offered by almost all insurance providers and generally (as the name suggests) covers death happens due to an accident.
What is accidental death?
If the insured sustain any injury on his or her body directly from an accident and such injury is solely and independently of all other causes result in the death of the policyholder within a period of 180 days of the accident, such death gets considered to be an accidental death.
Importance of accidental death benefit rider
Although the loss of any family member is inconsolable; however, life needs to move on. This holds the same for the insured’s loved ones as they need to sustain themselves financially in the absence of the policyholder. Here the importance of accidental death benefit rider is immense if by god’s forbid, the insured person died due to an accident. This rider safeguards the family of the insured financially by providing an additional amount (which is usually twice the sum assured) along with the insurance coverage amount. With these funds, the policyholder’s family can at least lead their life comfortably without compromising on the monetary front.
How Accidental Death Benefit Riders Work?
Most of the accidental death benefit rider offers an extra payout above the normal insurance coverage amount to the dependents of the policyholder. This additional instalment can sometimes be twofold the measure of cash your family gets, which is the reason this sort of rider is known as double indemnity rider. When the insurance company affirms that the insured’s demise meets the prerequisites of the rider, then his or her family member receives the payout.
Since the accidental death benefit rider adds to the coverage of your existing policy, getting one will probably increase your premiums. However, adding that security can spare your family from managing major expected costs later.
Exclusion in the accidental death benefit rider
Certain deaths are not included in the term insurance rider’s policy. If specific events like illegal activities cause the death or if it is a death due to drug overdose or alcohol, riots, self-inflicted injury, suicide, adventure sports like river rafting, bungee jumping, scuba diving etc., an act of war or hazardous hobbies amongst others, then such deaths do not qualify under the benefits of the rider. In case of a serious accident, then death must have occurred within the specified period in the policy.
Also, there are specific age limits to avail the benefits of the rider. Such as the rider benefit may not be applicable for a policyholder as he or she reaches the age of 75 years. You can’t even avail a rider after crossing 65 years of age.
As the saying goes ‘it is better to safe than sorry’, the value of a Term Insurance Rider can’t be ignored. It offers multiple benefits at a nominal fee and makes a lot of sense to add in your base policy coverage. Same is with the accidental death benefit rider that offers double benefit to the dependents of the policyholder in case of uncertainty. If you want to inquire more about riders, then you can visit BimaKaro.in and opt for a suitable rider as per your needs and requirements.