What All Customization Can Be Done In a Term Plan?

2022-07-10

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It is almost impossible to always anticipate the financial emergencies that might arise in our lives. That is why one of the most essential financial advice that can benefit all individuals and families alike is to avail a reliable, trusted term insurance plan. But exactly what is term insurance?

A term insurance plan is essentially a type of life insurance that offers life coverage at a fixed rate for a specified number of years, or ‘term’. In the event of the demise of the insured during this period, his nominees are liable to receive a death benefit. However, term insurance also comes with the option of various add-on features known as ‘riders’ that offer additional coverage based on specific circumstances.

One of the greatest benefits of term insurance plans is that unlike traditional life insurance policies, it offers a great deal of flexibility to the policyholder. Despite this, only 21% of urban Indians are reported to avail term insurance [1]. A major reason behind this is the lack of awareness about the many ways in which term insurance plans can be customised to suit individual needs.

To find out what is the term insurance customisation perfect for your financial needs, let us take a look at the various types of riders it offers:

Accidental Death Benefit Rider: This is one of the most common and significant customisations offered by term insurance plans. In the unfortunate event that the insured passes away as the result of an accident, the Accidental Death Benefit rider provides certain benefits to the nominees in addition to the death benefit. Consider a term insurance policy with a sum assured of Rs. 20 lakhs and an Accidental Death Benefit Rider of Rs. 5 lakhs. In the event of the accidental demise of the insured, his family would be liable to receive an overall claim of Rs. 25 lakhs.
Accidental Disability Rider: Typically, life insurance is assumed to provide coverage in the event of loss of life of the insured. However, other unfortunate events such as a disability can have an adverse impact on the financial health of an individual or a family.
To protect one’s finances against such an event, one can avail an Accidental Disability Rider. Depending on the insurance provider, your Accidental Disability Rider can cover either permanent disability, temporary disability or both. Certain term insurance plans can include a rider that accounts for both Accidental Death as well as Accidental Disability in its coverage.
Waiver of Premium Rider: A term insurance plan is expected to continue as long as the premium payments for the same are being made. If these premium payments stop, the policy can expire and one can lose the required coverage. However, it is possible that the insured might not be able to pay their premiums due to a financial emergency such as a loss of income.
Alternatively, they might be unable to pay their premiums due to a medical emergency or disability. To protect your coverage from such circumstances, you can avail a Waiver of Premium rider with your term insurance plan. With this rider, if you find yourself unable to pay premiums due to the aforementioned reasons, your future premiums are waived by the insurer. Your policy and coverage can therefore continue and your future premium payments are insured.
Critical Illness Rider: With rising hospital fees and medical bills, developing a critical illness such as diabetes, cardiovascular diseases, stroke and cancer can make a deep dent on your financial health. To help you cover for such medical crises, your term insurance plan can be accompanied with an additional and complete Critical Illness Rider.
Income Benefit Rider: For most policyholders, the primary purpose of their term insurance plan is to provide for their dependants in their absence. This can be efficiently achieved by availing the Income Benefit Rider. With this customisation, your family receives an additional annual income for a few years along with the death benefit. With the variety of customisations mentioned above, the right term insurance plan can be conveniently modified to ensure that you and your family’s financial needs are always met. The key is to find a reliable insurer and avail a term insurance plan that helps you stay prepared against any unfortunate event.

To that end, the iSelect Smart360 Term Plan, available on Canara HSBC Life Insurance , offers a variety of add-on riders that provide greater coverage and benefits. You also get the option to choose from a variety of tenures, including coverage up to age 80, as well as payment options.