Why should I get an Accidental Death Benefit Rider?

When you get a term insurance plan, you are already covered if you pass away due to an accident. But what if you are at a higher risk of accidents because of frequent travel or the nature of your work? Naturally, you'll want to get some additional financial protection with your term plan for your family.

The Accidental Death Benefit rider will help you with that. Once you opt for this rider, it will give you extra cover by ensuring that your family still gets the lump sum insurance money plus an additional amount of money if you pass away due to an accident.

You should buy the Accidental Death Benefit rider if you

• Travel frequently or
• Work in a harmful/accident-prone environment

This is because you are at a higher risk of dying by accident.

See, an accidental death benefit rider is like an extra cushioning to a pillow to make it more comfortable. It provides your family with extra money over and above the policy money when you pass away due to an accident.

Let's understand with an example.

Say, you have a term plan with a life cover of ₹ 1 crore and you have opted for an Accidental Death Benefit Rider cover of ₹ 50 lakhs.

In the event of your death, your family gets

• ₹ 1.5 crore if you pass away in an accident; or
• ₹ 1 crore if you die due to any other cause.

You can, in fact, double your life cover with this rider - at a considerably lower cost! (This is subject to the limits set by your insurer, of course.)

If you are eligible to buy a term insurance plan, you are eligible to buy an Accidental Death Benefit rider.

The Accidental Death Benefit Rider is not too expensive, and it costs less than buying a separate term plan with a higher life cover. The final cost of the rider will depend on your life insurance company. So it’s best if you speak to your insurer or insurance advisor for the details.

You can opt for it when buying your term life policy from a life insurance company, as part of the application process or you can buy it later on your policy anniversary.

Yes, of course! You can buy this rider later, on the day of your policy anniversary.

Technically, yes, you can double your cover. 

In fact, rather than buying a term plan with a ₹ 2.5 crore cover, it is far cheaper if you buy a term insurance cover worth ₹ 2 crore and an Accidental Death Benefit rider with a cover worth ₹ 50 lakhs. But remember, it is subject to the limits set by your insurer.

Yes, the Accidental Death Benefit rider will provide coverage for the entire duration of the term policy.

Yes, it does. Accidental Death Benefit rider is an additional rider which means it provides additional coverage over and above the original life cover amount.

Some of the exclusions in the Accidental Death Benefit rider are deaths due to:

• Suicide and self-inflicted injuries
• Drug overdose or alcohol abuse
• Participation in civil commotion, riots, war or rebellion
• Death/Disability after 180 days of the accident
• Failure to follow medical advice
• Dangerous activities

Speak to your insurer to check the complete list of rider exemptions.

Yes, you will. You can avail tax benefits* up to ₹ 1,50,000, provided that the premium payment does not exceed 10% of the life cover, under Section 80C and 10(10D) of the Income Tax Act, 1961.

_{*Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions and tax Laws are subject to change from time to time. You are requested to seek tax advice from Chartered Accountant or personal tax advisor with respect to personal tax liabilities under the Income-Tax law}

Yes, it does. The accidental death benefit rider is an additional rider, which means your loved ones get money that is over and above your term policy life cover. For example, if your term plan cover is ₹ 1 crore and your accidental death benefit cover is ₹ 20 lakhs, then, if you pass away due to an accident, your family will receive ₹ 1.2 crore, which is ₹ 1 crore from the term plan life cover and ₹ 20 lakhs from the accidental death benefit rider cover.

You need to check if you’re someone who is prone to accidents, for example, you may be prone to accidents if you work in a hazardous environment, such as a mine.
 

If you’re someone who is prone to accidents, you can get the accidental death benefit rider as it will give your loved ones additional money if you pass away from an accident. Additional money is not a bad thing, right?