What is the Family Protect Rider in Term Insurance Plans? Meaning and Benefits

Paying for your parents' retirement expenses can often run into several lakhs over the years, especially as healthcare costs in India are projected to rise by 13% annually. 

At Ditto, our advisors also speak to many policyholders who worry about how their aging parents would cope financially if something were to happen to them.

That's where the Family Protect Rider (also known as the Parental Care Rider) comes in. For this article, we reviewed official product brochures and consulted with our advisors to break down how the rider works, its place in a financial plan, and whether it's worth the extra premium.

Family Protect Rider (Parental Care): A Quick Overview

The Parental Care rider pays out if the policyholder dies or suffers an accidental total permanent disability (ATPD), meaning an accident that, within 180 days, causes permanent loss of vision in both eyes or the use of hands, arms, legs, or feet.

The condition must persist for at least six months, be certified by a registered medical practitioner, and claims must be intimated within 60 days.

Unlike lump-sum life insurance payouts, which may feel overwhelming for elderly parents to manage, this rider often structures benefits as monthly payouts, providing a steady stream of income to cover day-to-day expenses, including rising healthcare costs.

To sum it up, the Family Protect Rider offers both a lump sum and a monthly income for parents’ lifetime. 

Not sure which riders you actually need? Talk to Ditto’s expert advisors today and get unbiased, personalised guidance - absolutely free.

Which Term Plans Cover the Family Protect Rider?

The Family Protect Rider (Parental Care) is a unique feature offered by the Bajaj Allianz Life eTouch II plan.

This rider is also available as a paid add-on with the Bajaj Allianz Life Superwoman Term Plan, where it provides an optional child care cover, as a part of which a lump sum amount will be paid and a monthly income for the child's support till the child turns 25, in case of the mother's death. 

How to Avail the Family Protect Rider?

You can add the rider to your base policy only at the time of inception. The rider policy term and premium paying term must be aligned with the policy term and premium paying term of the base plan. It is also subject to underwriting as per the company’s prevailing underwriting guidelines.

How is the Payout Structure for a Family Protect Rider?

The Parental Care rider has a well-defined payout structure that combines both lump sum and income benefits:

• Immediate Lump Sum: 105% of the total rider premiums paid to date is paid out immediately.
• Monthly Income Benefit: A fixed percentage (0.1%–0.5%) of the Rider Sum Assured is paid as monthly income to your parents, starting immediately.
• Payment to Parents: The income is first paid to the older parent for life. After their death, it continues to the surviving parent until their lifetime.
• Choice at Inception: The percentage of monthly income must be decided at the time of purchase and cannot be changed later.

Let’s understand this with an example:

A 40-year-old buys a ₹1 crore term plan for 35 years and adds the Family Protect Rider with a ₹50 lakh cover. He opts for a ₹10,000 monthly income benefit (0.2% of Rider Sum Assured).

• Base Premium: ₹48,478/year
• Rider Premium: ₹7,014/year (payable for 10 years only)
• Total Premium: ₹55,492/year

So, he pays about ₹70,140 in rider premiums over 10 years.

If he passes away at 59, his parents get:

• A lump sum of ₹73,647 (105% of premiums paid), and
• A monthly income of ₹10,000 for life (first to the elder parent, then to the surviving parent.)

Note: No benefits shall be payable in case of the death of parents before the trigger of events under which rider benefits are payable. 

Who is Eligible for the Family Protect Rider (Parental Care)?

The eligibility criteria for the Family Protect Rider are as follows:

• The Life Assured (policyholder) must be between 18 and 65 years of age at the time of entry.
• The parents who are covered under the rider must be between 35 and 99 years of age.
• The rider's premium paying term is aligned with the base policy term, with a maximum rider term of up to 57 years.
• The minimum sum assured for the rider is ₹50,000, with no fixed maximum limit, but subject to underwriting guidelines and the sum assured under the base policy.
• The maximum limit for the Parental Care Option is 1 Crore, as capped in the underwriting guidelines.

How Much Extra Premium Do I Need to Pay for this Rider?

The Family Protect Rider premium is charged over and above your base term policy premium.

It depends mainly on:

• Parents’ age at entry
• Rider Sum Assured (the monthly income you choose)
• Rider Term (same as base policy term)
• Rider Premium Paying Term (same as base policy)

Let’s say a 30-year-old buys a ₹1 crore term plan (Bajaj Allianz eTouch II) till age 70. His parents are 63 and 59, and he opts for a ₹25,000 monthly income benefit.

• Base Premium: ₹14,903
• Rider Premium: ₹5,138
• Total Premium: ₹20,041

That’s about 35% higher than the base plan alone.

Remember: Premiums rise with parents’ age and higher income benefits. 

Does The Rider Cover Both Parents or Only One?

The rider can be taken for a single parent or for both parents together, depending on your preference and their eligibility.

Here’s how the benefits flow:

• If opting for both parents, the monthly income starts with the older parent.
• When the older parent passes away, the same monthly income continues to the younger parent for life.
• If chosen for only one parent, the benefit applies solely to that parent.

Quick Note: The exact arrangement (single or both parents) will be specified in your insurance policy documents at purchase.

Limitations of the Family Protect Rider

The Family Protect Rider offers valuable coverage, but it also comes with certain limitations that you should be aware of:

• Must Be Chosen at Inception: The rider cannot be added mid-term; it must be selected at the time of purchasing the base policy.
• Trigger Events: Benefits are payable only on the death or total permanent disability of the life assured.
• Higher Probability of Non-Activation: In many cases, parents may pass away before the policyholder. If that happens, the rider is never triggered, and premiums paid remain non-refundable.

Is There Any Alternative to the Family Protect Rider? 

Yes. Instead of adding the Family Protect Rider, you can

• Simply opt for a base term plan with a higher sum assured.
• Nominate your parents (or another trusted family member) as beneficiaries.

Both options are quite efficient because they would incur no extra rider premiums, and the benefits would be paid directly under the base policy without any additional conditions. You can also decide who should receive the payout and in what form. 

If you are still concerned about your parents handling a considerable lump sum, you have the following options:

• Nominate a trusted family member (e.g., a sibling, spouse, or close relative) to manage your finances.
• Ask the insurer to structure payouts in a monthly income mode instead of a lump sum.

Ditto’s Verdict: We generally do not recommend the monthly mode for most clients, but in this context, it could help your parents manage finances better.

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Ditto’s Take on the Family Protect Rider (Parental Care)

We generally do not recommend the parental care rider primarily because the likelihood of a payout is very low. Most policyholders are far more likely to outlive their parents, meaning the premiums paid for this rider might be completely wasted. This makes the rider a poor value proposition for many families.

However, seeking this rider could make sense if your primary concern is disability coverage. Currently, Bajaj Allianz does not offer any separate disability rider. So, the family protect rider can partly serve that gap (for accidental total and permanent disability).

If you’re still unsure, speak with a Ditto advisor today for a free, no-spam consultation and receive personalized guidance to help your term plan work harder for you.