When you purchase a term insurance plan, the idea is that this policy cover amount will act as your financial replacement in the event of your unfortunate absence. The aim is to ensure your family's financial safety in case the family's breadwinner passes away.
However, not to sound morbid, what happens if you are disabled? What happens if you lose your mobility or eyesight? Without the function of the eyes/limbs, you may
- lose your job and your source of income,
- miss out on making premium payments, and thus your term insurance policy too.
Isn’t it?
Well, that CAN BE AVOIDED!
Term insurance plans are all about staying financially prepared for the worst times of your life. If you choose an Accidental Total and Permanent Disability Rider for your term insurance policy, you are covered in case you are left completely disabled.
How? Let’s find out!
What is Accidental Total and Permanent Disability Rider in Term Insurance?
Accidental Total and Permanent Disability Rider in your term insurance plan is a financial perk that is extended to you in the case of a loss of -
- Both legs and/or both arms
- Both eyes
- One leg and one arm
-due to an accident.
Now, the benefits extended by this rider vary from one term insurance provider to the other. While one insurer may offer you a lump sum amount, others might offer you a waiver of premium. Moreover, this rider may or may not be an independent add-on to your plan. Based on the term insurance provider you have approached, this rider may be offered as a standalone option or as a combined perk via income riders or Critical Illness Riders.
Best Term Insurance Plans Offering Accidental Total and Permanent Disability Rider?
| Insurance Plan | Minimum Coverage | Conditions Covered | Feature | Benefit |
|---|---|---|---|---|
| HDFC Life Click 2 Protect Life | Minimum - ₹1,00,000 Maximum - The maximum Sum Assured shall not exceed the Sum Assured of the base policy to which this rider is attached. |
|
Offered via Income Benefit Rider | It acts as an income replacement, providing 1% of the rider sum assured every month for the next 10 years. |
| ICICI iProtect Smart | NA | Mobility, Bending, Climbing, Lifting, Writing, Blindness (PD will be triggered if the life assured is unable to perform 3 out of the above 6 Activities.) | In-built feature | Waives off the future premiums. |
| Max Life Smart Secure Plus Plan | ₹5 lakhs is the minimum and maximum depending on the age of the insured. | Max Life has a list of critical illnesses and the insured can include TPD in the CI rider. The inability of the Insured Person to perform at least 3 of the 6 activities of daily living as listed: Washing, Dressing, Transferring, Mobility, Toileting, and Feeding | Offered under the Critical Illness (CI) Rider | A lump sum amount is paid to the insured in case of critical illness or permanent disability diagnosis. The insured should choose the amount at the time of inception of the plan. |
Should You Buy An Accidental Total and Permanent Disability Rider With Term Insurance Plans?
Accidental Total and Permanent Disability (ATPD) Riders are a good pick considering -
- It may act as an income substitute
In the case of a disability, your source of income either develops a few hiccups or stops completely. Under such circumstances, you are looking at diminished or no income at all. So, your family is left financially vulnerable and with no means to continue with the daily expenses.
Subsequently, an Accidental Total and Permanent Disability (ATPD) Rider may be of substantial help, provided you have chosen an insurer that offers payouts (lump sum or monthly) as a perk of this rider.
For example HDFC LIfe’s Income Benefit Rider. HDFC doesn’t offer any separate rider for Accidental Total and Permanent Disability. Rather, this perk is extended via their Income Benefit Rider only.
Say, Amit avails of the HDFC LIfe’s Income Benefit Rider for a cover amount of ₹10 lakhs. In the event of his permanent total disability, he will receive ₹10k (1% of his ₹10 lakh rider amount) each month for the next 10 years. This amount can help with his monthly household expenses
2. It may offer a waiver of term insurance premiums
In the case of some term insurers, under their Accidental Total and Permanent Disability (ATPD) Rider, they don’t offer any payouts. Rather, these insurers offer a waiver on the premium payments towards the term insurance plan.
So, even if you are disabled, without a source of income, and unable to pay premiums towards your term plan, your term coverage continues. In the future, in case of your unfortunate passing away, your family will have the benefit of a substantial amount that will help them with their future financial requirements.
3. It requires affordable premiums
Term insurance plans, in general, are extremely pocket-friendly.
Say, you are a 25-year-old male, non-smoker seeking a ₹2 crore coverage till you are 65. Under such circumstances, your yearly premiums will come to -
| HDFC LIFE | ICICI PRUDENTIAL | MAX LIFE |
|---|---|---|
| ₹21,041 | ₹16,941 | ₹17,936 |
Similarly, riders like Accidental Total and Permanent Disability Riders incur very affordable premiums. And yet, the benefits offered by them are significant.
Considering such perks, Accidental Total and Permanent Disability Riders are a good pick for your term insurance policy. However, you may want to consider if you should purchase this rider or an Income Benefit rider, Critical Illness Rider, or Waiver of Premium Rider which would offer multiple perks, including this one.
The choice/decision about whether you should purchase the Accidental Total and Permanent Disability Rider depends also on the term insurance provider that you choose and the kind of perks that they extend over your chosen plan.
What Documents Are Required To File An Accidental Total and Permanent Disability Rider Claim?
Term insurance providers are specifically strict about the documentation procedure during a claim settlement process. So, in case you have an active Accidental Total and Permanent Disability Rider with your term insurance plan and need to file for a claim, here’s a list of documents you need to keep ready -
- Original term insurance policy documents
- ID proof
- Photo and address proof
- FIR documents regarding the accident
- Medical bills/prescriptions showcasing your permanent and total disability from a licensed doctor.
- Accurately filed claim forms
- Cancelled cheque or bank passbook
What are the Exclusions For Accidental Total and Permanent Disability Rider in Term Insurance?
Much like in the case of a vanilla term insurance policy, there are exclusions in the case of Accidental Total and Permanent Disability Riders as well.
- Disability caused by wars
- Disability from an accident caused by driving under the influence of alcohol, drugs, etc. In such cases, the perpetrator isn’t covered if he/she develops a permanent and total disability. However, if the policyholder is a victim, he/she will be covered.
- If the disability is caused 180 days after the accident.
- If the disability is a result of a suicide attempt.
Conclusion
In an attempt to customise the vanilla term insurance policies, providers offer a range of riders that are meant to tailor the product as per the medical and financial goals of the policyholder. However, not all term insurance riders yield the desired value-worthy services. So, when choosing the Accidental Total and Permanent Disability Rider, you need to take a look at the other add-ons offered by the insurer (in case any other rider combines it in their offering) and the perks the insurer is extending under this rider (payouts/waiver of premium). Otherwise, this rider is a decent pick!