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Know All About the Accidental Death Benefit Rider

The Benefit rider is eligible for tax benefits under Section 80C of the Income Tax Act and it can be attached to any policy, be it term plan or unit-linked plans

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Representational Image. Image source: www.lifeinsurancepolicyusa.com
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It was just another Monday morning. As the clock struck 8, I kissed my one-year-old daughter, waved goodbye to my wife and set out to drive to work. Luckily for me, there wasn’t much traffic today. But as soon as I reached the highway, another car zoomed past me. The driver probably had to get to work early for a meeting with his boss. There was a “Baby-on-board” sticker at the back of the car which brought a smile to my face as thoughts went back to my daughter and the first time she called me “da-da.”

However, my thoughts were interrupted with loud horns and screeching of tires. The truck on the 2nd lane had suddenly swerved right and would have hit the car if the driver had not applied the brakes at the right time. Seeing what unfolded in front of my eyes in a matter of seconds shocked me. Soon a series of questions popped up in my mind – the answers to which were not so pleasant. Questions like – What if the driver of the car had not slammed the breaks which would have otherwise led to an accident? What about his baby? Even worse, what if it was me a little ahead who had met with the accident? Would my wife be able to take care of our one-year-old daughter on her own?

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In every four minutes, one person dies in a road accident in India, according to the NGO “Indians for Road Safety”. As per the data released by the Ministry of Road Transport and Highways, more than 1.45 lakh people lost their lives on Indian roads in 2015. Incidences of careless driving and uncertain terrains have made roads risky for a common man. Of course, under any such circumstances, the death of a loved one is a harrowing experience but with deep sorrow, the family will also need to deal with a financial crisis.

Here, the accidental death benefit rider proves beneficial for the family. A certain sum of money is paid over and above of basic sum assured to the nominee if the policyholder dies in an accident. For instance, Raj has bought a term insurance of Rs 50 lakhs and an additional accidental death benefit rider of the same amount. Now if Raj dies a natural death within the policy tenure, his nominee would be entitled to get Rs 50 lakhs. But if Raj dies in an accident, the nominee would get total Rs 1 crore.

Risks (Representational Image) Image source: livemint.com
Risks (Representational Image) Image source: livemint.com

Let’s understand what it entails.

Why should you buy the accidental death benefit rider?

How often do we see a family suffers financially because the breadwinner met with an accident? The jeopardy of permanent loss of income is devastating for the family. Therefore, it is highly recommended to buy an accidental death benefit rider so that in an event of death, the nominee gets an additional amount apart from the basic sum assured.

Further, this rider offers extra protection at a nominal premium rate. For instance, a 26-years old needs to pay Rs 7191 to get a life cover of Rs 1 crore under ICICI Pru iProtect Smart Plan. By paying an extra amount of Rs 472/month, he can enjoy triple benefits— terminal illness benefit + waiver of premium on disability + accidental death benefit.  In this way, he can give triple protection to his family.

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Moreover, this rider is eligible for tax benefits under Section 80C of the Income Tax Act and it can be attached to any policy, be it term plan or unit-linked plans.

Key Features of the Accidental Death Benefit Rider

Most of the insurers offer accidental death benefit riders with the following features:

  • Flexibility to choose premium mode as per own convenience—Single, Limited, and Regular Pay
  • Comprehensive protection till the end of the term of the main policy
  • Option to choose the rider either at inception or policy anniversary

What does it include?

For the purpose of payout, any accidental death caused by an external, unforeseen and violent force is covered under this rider. Also, such injury shall cause the death of the policyholder, generally within 90-180 days of the occurrence of the accident.

Exclusions

There are certain events which are not covered by accidental death benefit rider, and these are:

  • Attempted suicide or self-inflicted injuries
  • Engaging in aerial flights
  • Death of the life assured with criminal intent
  • Death due to participation in war or engaging in hazardous sports

Conclusion

The only thing certain about life is its uncertainty. We don’t know where life will take us, who will cross our way, and which direction we will be heading. But still, it doesn’t mean we should sit idle and let our destiny decide the next course of action.

Accidents bring along dire consequences and prove to be fatal for a family. It is true that we can’t control the uncertainty of life, but nothing can stand in the way of someone who is prepared to fight against all odds. So let’s become the master of our destiny and protect our family against any hurdles and surprises which this journey, called life, has in store for us.

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Organized and Successful Planning is the Key to a Rational Decision

Any crucial decision in your life is a result of a well-thought-out debate, whether you buy an electrical appliance or choose a career

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Africa is no more the poor country we think it is, it is time to break the stereotypes.
  • Decision-making can be tough for many
  • To make a rational decision, planning is very important
  • A happy life is only guaranteed when we are sure of the decisions we make

Reaching a decision is not an easy task. It requires multiple sessions of discussions with your dear ones, and at times, with yourself. A logical and reasonable decision asks for a period of systematic planning and scheming that see

Children today lack the thinking skills
Planning and talking are important to make any decision. Pixabay

ms to succeed all obstacles. Naturally, this holds true for all the spheres of life.

A pre-planned decision helps to live a life happily without unnecessary risks. It also reduces the chance of committing goof-ups or mistakes thereby propelling life through a smooth path. Therefore, if you want to have a tension free and protected future, you need to start planning from now. Taking this step will help you dodge all problems that life offers every now and then.

How plans prove to be of help?

Thorough planning can be of much help, even for simple tasks such as studying for your exams or major life events such as career planning. If you are still wondering about the capability of organised planning, then these instances can solve the dilemma appreciably:

  • Regular studying: It is good to chalk out a blueprint of your daily routines and dedicate fixed time duration for studying regular throughout the year. This will not only strengthen your base and provide you with confidence but will also prevent sudden disasters.
  • Career planning: Choosing a career is a crucial stage, and you should take this decision after a proper understanding of the situation. If you start planning beforehand and utilise your strengths, you can easily decide the best career for you.

    Career planning always needs one to think rationally.

However, planning is not always about self-planning, rather, you must strive to secure the future of your loved ones.Online term insurance is the most feasible option in this regard as it can protect your family for future uncertainties. Before subscribing to this thought, it is wise to understand the nuances and then reach a rational decision. Following points will help you make an informed decision:

Term insurance plan can cover your life at the lowest possible cost as compared to other plans. If any mishap happens to you,your ‘nominee’ will get the payout once he/she claims the death benefit. Moreover, insurancecompanies offer four different options to choose (while keeping in mind the benefits of the policyholder and his/ her family). Again, this decision also calls for organised planning, to see which payout option will suit your family if you aren’t there to suffice for them.

Also Read: Dying is ‘Less Sad’ than you Think: Study

Few other considerations

Here are other vital aspects to consider while opting for term insurance:

  • The term plan is an ideal one if you buy it in the range of 10-20 times of your annual income
  • There is no perfect time to buy term insurance online but go for it as early as possible
  • In addition to basic term cover, consider specific riders such as critical illness rider, accidental death benefit rider, accidental disability rider which can make your term plan a more secure one

Why go for it?

If you still think that why you should buy term insurance online, then there are quite a few valid reasons to do so. Do you want your young ones to compromise with their dream when you are not around to tend to it? Or do you want your spouse and family to go through a financial crisis because of your sudden demise? Of course, not!

Decisions can only be made when one is in a clear mindset.

Your family is precious, and in order to guard them, you will have to understand the value of your own life and money. Term insurance plans are not a luxury or mindless ploys; rather these are a necessary investment for a better and brighter future. So, know your needs and buy term insurance online to secure the future of your loved ones.

Conclusion:

Any crucial decision in your life is a result of a well-thought-out debate, whether you buy an electrical appliance or choose a career. Therefore, always use your rationality to organise your ideas and reach a favourable conclusion!