Strengthening your term life protection

Your term life insurance policy provides basic insurance protection for a limited period. When you die within that period, your beneficiaries will get the sum insured. It’s that simple.

However, you can also opt to get add-ins to beef up your policy. This will provide you and your beneficiaries with more benefits and protection.

Here are some additional options:

Waiver of Premiums Rider

This benefit waives any future premiums if the person insured meets certain criteria. This usually includes permanent disability resulting from an injury or an illness that prevents the insured from earning an income. The waiver is lifted when the insured recovers from the disability and he is ready to go back to work again, or when the number of months that the benefit is payable has already been used up. This rider prevents the policy from lapsing in the event that you become disabled (which is certainly a time when you will need the coverage most).

Why get this rider? This rider helps prevents the policy from lapsing due to the Person Insured’s disability. If the Person Insured can no longer earn and income (and can no longer pay for the premiums), the policy will terminate, just at a time when the insured needs the coverage.

Accidental Death Rider

This doubles the sum insured if the Insured person dies due to an accident. This rider is also called the double indemnity rider. The definition for “accident” may vary from one insurance company to another.

Why get this rider? A catastrophic accident can involve huge hospital bills. The double payment can help fund the hospital costs, as well as the funeral expenses.

Accelerated Death Benefit Rider

This rider advances a portion of the sum insured if the Insured is diagnosed with a terminal illness. Usually, a terminal illness is defined as an illness where the Insured is not expected to live for more than 12 months. The advance may be used to fund the Insured’s treatment or to improve the quality of life. When the insured passes away, the rest of the sum insured will be paid out to the beneficiaries. Also dubbed the terminal illness rider, this is often offered free of charge by some providers.

Why get this rider? This rider allows the Person Insured to benefit from the proceeds of the insurance. He can use the funds to ease the pain of the terminal illness, fulfil a lifelong dream (such as travelling around the world) or equip his home with adaptive equipment that will make the patient become more comfortable.

Family Income Benefit Rider

This provides a stead and regular monthly income to the beneficiaries. This income is over and above the death benefit. The income starts when the insured dies within the policy term and will pay the monthly income until the end of the coverage period. When this rider is bought, the insured chooses the length of the payment period. Thus, if the insured dies near the end of the policy’s term, the rider will make fewer monthly income payments.

Why get this rider? A huge lump sum can be pretty tempting. The beneficiaries may unwisely splurge the money away and then be left without the means to provide for future expenses. The monthly benefit income allows the family with what they need for the month, keeping the rest of the insurance proceeds intact for the family’s future needs.

Child Term Rider

This rider allows coverage for the Insured’s children. As long as the child is below a certain age (18 or 21, depending on the policy), the child will be covered while the policy is in force. This cover is given without the child undergoing a medical exam.

Why get this rider? There are some providers that offer free child coverage. This will help cover costs in the event of a child’s death.

Illnesses a critical illness rider covers:

CI covers a list of common critical illnesses, but the diseases covered (and the severity by which they are covered) will vary from provider to provider. The most common critical illnesses include:

  • Stroke
  • Cancer
  • Major organ transplant
  • Permanent disability
  • Motor Neurone Disease
  • Parkinson’s Disease
  • Heart valve repair
  • Multiple Sclerosis

Critical Illness Rider

This rider provides the lump sum in the event that the Insured is diagnosed with a critical illness that is listed in the policy. Depending on how the policy is set up, the policy may pay only once. When the Insured is diagnosed with a critical illness and the policy pays out, the policy is terminated.

Why get this rider? This can be a rider or a separate cover itself. Critical Illness cover provides an amount equal to the lump sum, which can be used for the patient’s treatment.

Return of Premium

This will make your overall premiums more expensive (around 20 to 30%). However, this rider ensures that you can get either partial or full refund of the premiums if you survive the policy coverage period.

Why get this rider? Since a term life policy is temporary cover, once the policy term has passed and the Person Insured survives, he gets nothing out of the policy. This rider ensures that he gets something back from the premiums he paid out.

With these riders, you can provide another level of protection in terms of your life insurance. You can choose which rider is applicable for your particular needs. Of course, you will be paying for extra premiums for each of the riders you add to your policy.

Updated on: 05.06.2013

To secure your family's future, fill in the form on the right and get your term life insurance quote now.

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*Scottish Provident 2012 life cover claims paid report.