Term insurance policies have recently become quite a popular financial product thanks to their affordability, simplicity, flexibility, and easy access to high cover amounts. This is a vanilla protection tool that is considered effective in the event of the policyholder's death.
However, what if a policyholder is diagnosed with some fatal ailment and has months to live? What if, during this time, his family has already started facing financial hurdles due to the policyholder’s inability to work, considering his deteriorating health?
Well, this is where optional additions like Accelerated Death Benefit Riders come into play. So what exactly is an Accelerated Death Benefit Rider in term insurance policies? Should you opt for it? What are the best term insurance policies with Accelerated Death Benefit Riders?
Read on to find the answers!
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What are the Best Term Insurance Plans with Accelerated Death Benefit Riders?
What are Accelerated Death Benefit Riders in Term Insurance Plans?
An accelerated death benefit rider, sometimes referred to as a terminal illness rider, is an optional feature added to a term insurance policy. It enables the policyholder to access a portion of the death benefit early if diagnosed with a serious illness, typically a terminal one. The advanced amount is subtracted from the total death benefit and can be used to cover expenses such as medical treatments and end-of-life care.
What are the Best Term Insurance Plans with Accelerated Death Benefit Riders?
- Max Life Smart Secure Plus – This comprehensive and affordable term insurance plan from Max Life, one of the largest private insurers in the country, offers numerous benefits, including:
- Accidental Death Benefits
- Zero Cost Term Plan Options
- Option to Boost Coverage to Match Inflation
- Waiver of Premiums in Case of Accidental Total and Permanent Disability or Diagnosis of a Critical Illness
- Critical Illness Rider
- Top-Up Option to Increase Coverage After Policy Purchase
- Total Permanent Disability Rider
- In-Built Terminal Illness Rider
- Maturity Benefits Through Premium Returns
Additionally, this plan is an outstanding term insurance option for smokers, offering lower premiums for smoker profiles compared to others in its category.
Drawbacks: Although the terminal illness benefit is included, insurers do not pay out the full sum assured upon the diagnosis of a terminal illness (with a poor prognosis and a few months to live as confirmed by a doctor in writing). Instead, only a portion of the sum assured is disbursed.
2. Bajaj Life Smart Protect Goal - The Smart Protect Goal from Bajaj Allianz Life is a solid and comprehensive policy offering several benefits:
- Accidental Death Benefit
- Adjustment of the Total Sum Assured to Account for Inflation
- Critical Illness Rider
- Total and Permanent Disability Rider
- Maturity Benefits Through Premium Returns
Drawbacks: The Critical Illness Rider in the Bajaj Allianz Life Smart Protect Goal plan does not include an Accelerated option. It only offers the standard variant, where the Critical Illness amount is added to the base sum assured. Additionally, this plan does not feature a Zero Cost Option, terminal illness benefit, top-up option, or Waiver of Premium.
3. TATA AIA Maha Raksha Supreme - The TATA AIA Maha Raksha Supreme policy stands out as one of the most affordable term insurance plans in the industry, gaining widespread popularity among policyholders. TATA AIA excels in key credibility metrics such as Claim Settlement Ratio, Amount Settlement Ratio, and complaint volume. Its comprehensive features give it a distinct advantage over other plans.
Key benefits of the TATA AIA Maha Raksha Supreme policy include:
- Accidental Death Benefit
- Waiver of Premiums in Case of Accidental Total and Permanent Disability or Diagnosis of a Critical Illness
- Critical Illness Rider
- Total Permanent Disability Rider
While the plan is highly advantageous, potential policyholders should be aware of a few notable restrictions before making a decision.
Drawbacks: Potential policyholders might face some challenges due to TATA AIA’s recent operational efficiency issues. Moreover, the plan is restricted to individuals with an annual income of over ₹15 lakhs and a coverage amount exceeding ₹2 crores.
4. ICICI Prudential iProtect Smart - This term insurance plan is an excellent choice—affordable, comprehensive, and feature-rich. Notably, it offers lower premiums for smokers, who typically face premiums double those of non-smokers.
Key features include:
- Accidental Death Benefit Rider
- In-Built Zero Cost Term Plan Option
- In-Built Terminal Illness Benefit
- In-Built Life Stage Benefit Option
- In-Built Waiver of Premium in Case of Total Permanent Disability
- Maturity Benefits in the Form of Premium Returns (Rider)
Drawbacks: The plan does not permit an inflation-based increase in the base cover amount and lacks riders for total and permanent disability. Furthermore, the policy does not offer accelerated options for its Critical Illness Rider, only providing the standard option where the payout is in addition to the base sum assured.
5. HDFC LIFE Click 2 Protect Life - HDFC Life is a leading life insurance provider with outstanding credibility metrics over the past three years. This plan offers several appealing features, including:
- Accidental Death Benefit Rider
- Waiver of Premium for Critical Illness and Total and Permanent Disability
- Total and Permanent Disability Rider
- Critical Illness Rider
- Maturity Benefits Through Premium Returns
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Drawbacks: Unfortunately, the Click 2 Protect Life plan from HDFC Life lacks several features found in other policies in its category. It does not offer a zero-cost option, terminal illness benefits, a top-up option, or an inflation-based increase in coverage. Additionally, this policy, like many from HDFC Life, tends to be comparatively expensive.
