Can You Add Riders to Your Term Insurance After Purchase?
You purchase a term life policy to safeguard future finances for your loved ones in case any unforeseen event occurs.
You purchase a term life policy to safeguard future finances for your loved ones in case any unforeseen event occurs. But you sometimes change your opinion and priorities based on changes in life circumstances. Such a change can make you want to tweak your insurance needs.
Many insurance policies allow for flexibility. They include options like adding riders to your insurance even after a term life policy purchase. These are additional benefits that can be attached to a standard term insurance policy. They offer several extended coverages for the specific needs of the policyholder.
This post talks about how you can add riders to your term insurance. You can also read about the eligibility criteria, popular rider options, and much more. Give a quick read if you wish to make an informed decision or just for the sake of staying informed.
How to Add Riders to Your Term Insurance?
Adding riders to your term insurance policy after purchase is a straightforward process. The specifics may vary based on the insurer and the type of policy you have. This is a general guide to add riders to your term insurance:
1. Review Policy Terms: Check the terms and conditions of your policy and see if it is allowing you to add riders.
2. Contact Your Insurer: Before moving further, you must contact your insurance company (customer service or personal meeting). Inquire about the specific rider options available for your particular term life policy.
3. Assess Additional Costs: The riders can increase your premium. Use a term insurance premium calculator to get an estimate of how these changes may affect your overall premium. So, understand how different riders can increase your monthly or annual payments.
4. Submit Documentation: When you fill out an application form (in most cases), you will need to submit relevant documents.
5. Complete Medical Assessments (if applicable): Additional medical assessments may also be needed (if riders are linked to health-related coverage). The insurance company may ask you to undergo medical tests as your health status may affect the approval process.
After the application, your insurer will review it and confirm if the rider can be added or not.
Popular Riders You Can Add to Your Term Insurance Policy
These are the term insurance riders that policyholders usually add to their term insurance policies:
1. Critical Illness Rider: It offers a lump sum payout if the insured person happens to have a covered catastrophic illness (cancer, heart disease, stroke, or kidney failure). The money assists in paying for treatment expenses, medical bills, and lost wages while recovering.
2. Accidental Death Benefit Rider: It provides an extra reward if the insured passes away in an accident. It increases the payout from your basic term insurance policy. Plus, the rider gives your family more financial stability in the event of a tragedy.
3. Waiver of Premium Rider: It will waive future premiums if the person becomes incapacitated or critically ill and is unable to work.
4. Accidental Disability Rider: If an accident leaves the person disabled, it provides financial support to pay for their needs. The needs can be medical bills, rehabilitation costs, and lost wages because the person is not able to work anymore.
5. Income Benefit Rider: It will pay the beneficiaries each month if the insured person dies within the policy's term. It guarantees that their family's financial necessities are satisfied and helps restore the lost income.
6. Terminal Illness Benefit Rider: It provides the beneficiaries with an advanced portion of the sum assured if the insured person is diagnosed with a terminal illness. The payout can be used for treatment and related costs. The remaining amount will be given to the beneficiary in the event of the insured person’s death.
Eligibility Criteria for Adding Riders to Your Term Insurance
As a policyholder, you need to find out whether you are eligible to add every rider to your life insurance policy or not. Understand the eligibility criteria to make it easy.
Note: Do not forget to check with your insurer to confirm your eligibility before making any decisions.
Eligibility Criteria | Details |
Age & Health Conditions | Riders with critical illness may have an age limit and require medical assessments. |
Sum Assured | The rider sum assured cannot exceed the base policy sum assured. |
Premium Limitation | Rider premiums must not exceed 30% of the base policy premium (IRDAI rule). |
Rider Term | The rider term cannot exceed the base policy term. |
Policy Type | Not all term policies support riders; check if your policy allows them. |
Underwriting Process | Some riders may require additional documentation or medical evaluations. |
Premium Considerations | Adding a rider increases premiums; eligibility may depend on premium-payment limits. |
Do's and Don’ts When Adding Riders to Your Term Insurance
The following are the key Do's and Don’ts when one plans to add riders to their term insurance after purchase.
Do's:
· Review premium costs before you proceed with them.
· Understand the coverage limits or exclusions
· Ensure compatibility to save benefit duplication with your existing policy
· Check policy term restrictions within your long-term financial goals and see that they align with the time frame of your policy.
Don’ts:
· Don’t add riders without complete understanding (cost, coverage limitations, and compatibility)
· Don’t overestimate the payout, as it may have payout limits
· Don’t ignore age and term limits
Summing up
Adding riders to your term life policy can enhance your coverage. The addition makes the policy more fruitful to your specific needs. If someone needs extra protection for critical illnesses, accidental death, or disability, riders are good and flexible options.
You can add riders after you buy a term insurance policy. Just keep in mind your needs, eligibility, and the additional costs to avoid any confusion. Select and add riders to the right ones in the right ways for your family.
FAQs on Term Life Policy
1. Should we buy riders with term insurance?
- Yes, you can buy term insurance riders. They are add-ons to your policy to cover particular needs, such as accidental death or a critical illness.
2. What is the cost of adding riders to your term insurance?
- The cost of adding riders to term insurance can vary depending on the type of rider. The added premium covers the rider and the entire policy, providing greater family protection. You must assess affordability before committing to any riders.
3. What is an accidental rider in term insurance?
- If an insured member dies due to an accident, this rider promises an additional sum. This sum is over and above the basic sum assured.
· https://www.canarahsbclife.com/blog/life-insurance
· https://www.canarahsbclife.com/blog/term-insurance/riders-in-term-insurance
· This should be moved up. After this, the eligibility should come.
· https://www.canarahsbclife.com/blog/term-insurance/riders-in-term-insurance
(No Hans India Journalist was involved in creation of this content)
