Life Stage Benefit Rider in Term Insurance

As life progresses, your insurance needs may change. At Ditto, we have spoken to thousands of policyholders who want to enhance their term insurance cover within a few years of purchase due to their changing financial responsibilities. 

In contrast, our advisors have also seen many that miss out on customizing their protection simply because they don’t account for milestones like marriage, childbirth, or major loans when buying their first term plan. This is where the life stage benefit rider comes into play.

In this article, we will walk you through the key features of the life stage benefit rider in term insurance to analyze whether it’s the right choice for you.

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

Life Stage Benefit Rider in Term Insurance: A Quick Overview

Life stages are often predetermined by insurance companies, and include important events like getting married, having children, taking a home loan, or buying a property, among others.

A life stage benefit rider aims to provide you with the option to increase coverage without taking up the hassle of buying another one. It's a top-up that adds to the base cover amount. 

The upgrade sum assured will be applicable under your existing plan from the next policy renewal.

Ditto’s Take: While the benefit is free to avail, once your cover amount is increased, you may expect an increase in your premiums for that additional cover. This is subject to underwriting (based on your age, income, and medical history at the point of increase).

Key Highlights

1. Initial Term Plan Purchase: You buy a base term plan with a chosen sum assured (say ₹1 crore).
2. Life Milestone Occurs: After marriage or any other life stage event, you want to increase your coverage.
3. Rider Activation: The rider allows you to increase your sum assured (for example, by 25–50% of your existing coverage). 
4. Premium Adjustment: When you increase your cover, the premium rises only for the additional amount, calculated based on your age at the time of the increase. The premium for your existing cover remains unchanged.

Quick Note: You can use the life stage benefit rider any time during your policy term, as long as you opted for it at the time of purchasing your term insurance plan. 

Which Term Insurance Plans Cover the Life Stage Benefit Rider?

Although several plans like SBI Life Smart Shield Plus, PNB Mera Term Plan Plus, and Aditya Birla Digishield cover this rider, at Ditto, we generally recommend the following: 

1. HDFC LIFE Click2Protect Supreme

At inception, this HDFC plan pre-underwrites you with an additional buffer. This means you can increase your cover later without needing to undergo new medicals (fresh underwriting). However, the maximum total cover (base + life stage increases) is capped at the lower of:

• 1.5 times your base sum assured (150% of the original cover), 

OR

• Base sum assured + ₹1 crore

For example, if your base cover at purchase is ₹1 crore:

• 1.5 × base sum assured = ₹1.5 crore
• Base sum assured + ₹1 crore = ₹2 crore

Since the lower value applies, your maximum cover will be ₹1.5 crore. In other words, you can add up to ₹50 lakh via the life stage option without any underwriting. Beyond this, it will need fresh underwriting. 

In essence, the plan’s life stage benefit allows you to enhance your sum assured at these key life events: 

• Marriage – up to 50% of base cover (max ₹50 lakhs)
• Birth of 1st child – up to 25% (max ₹25 lakhs)
• Birth of 2nd child – up to 25% (max ₹25 lakhs)

For more details, refer to page 10 of the policy brochure. 

Ditto’s Take: If your financial eligibility does not support the higher cover (base + buffer), the Life stage option may not be approved for you by the insurer, even if the base cover itself is. 

2. ICICI Prudential IProtect Smart Plus

This plan allows policyholders with regular pay policies (meaning the premium payment term is equal to the policy coverage term) to increase their coverage at critical milestones. You can enhance your sum assured just like in HDFC Life C2P Supreme, but this plan also lets you increase it by up to 100% to cover legal adoption of children and your home loan liability. 

For more details, refer to page 2 of the policy wording. 

3. Bajaj Allianz Life eTouch II

This plan allows policyholders (below age 45) to enhance their sum assured at important milestones. You can upgrade your policy only if it has at least 10 years left and a premium payment term of 5 years or more.

The cover can be increased on key events like marriage, birth or adoption of first and second child, home loan, and education loan for children.

To learn more, refer to page 11 of the policy wording. 

4. TATA AIA Sampoorna Raksha Promise

Just like HDFC Life, Tata AIA’s life stage option is partly underwritten at the time of purchase. The insurer sets aside a buffer for future cover increases, equal to the lower of 50% of the base cover or ₹50 lakh. This lets you raise your cover later, within that buffer, without fresh medical or financial checks. 

Meanwhile, the sum assured can be enhanced in the same way as the ICICI Prudential iProtect Smart Plus Plan.

For more information, refer to page 10 of the policy brochure. 

Quick Note: You must be 49 years or younger to opt for the life stage benefit option of this plan.

Are There Any Riders Similar to the Life Stage Benefit Option?

While Axis Max Life Smart Term Plan Plus is one of our top recommendations for its performance metrics, comprehensive features, and competitive pricing, it doesn’t include the life stage benefit. Instead, it compensates with the Lifeline Plus benefit, which allows a woman policyholder to increase her cover after her spouse’s death through a one-time top-up. It's available after 3 years of the policy and within 6 months to 2 years of the spouse’s demise. 

The top-up is capped at the lower of 50% of the base cover or ₹50 lakh, with premiums based on the woman’s age. It requires two primary things: proof of marriage and spouse’s death. This also means she will be subject to medical underwriting again at the time of the top-up.

For more details, refer to the optional riders section of the policy brochure. 

Note: The life stage benefit must be chosen at inception (e.g., for HDFC Life and Tata AIA plans) and exercised within six months of the life event. 

Who Should Consider This Rider?

The life stage benefit rider is suitable for:

• Young professionals starting with lower coverage and anticipating major life milestones in the next 10–20 years.
• Newly married couples or parents-to-be looking to secure extra protection as their family grows.
• Perspective homebuyers, expecting to borrow for the purchase. 

What Are the Scenarios in Which the Life Stage Benefit Rider Won't Work?

Here are the cases where the life stage benefit rider won’t be available:

1) Maximum Increase Limit Reached

You can only enhance your cover up to the insurer’s specified cap (like 50% or 100% of the base sum assured). Once you hit this limit, the rider can’t be used again. Plans like eTouch II and Click2Protect Supreme apply both a percentage limit and a monetary cap, while ICICI Prudential iProtect Smart Plus and Tata AIA Sampoorna Raksha Promise are more flexible, restricting only by percentage.

2) Age Restrictions

Although the term plan can be purchased by individuals aged 60/65, the life stage benefit is only available to those under 50 at the time of plan purchase and benefit selection. 

3) Missed Notification Window

You must inform the insurer about your life event within the specified window (often 6 months). Late notification means you lose the chance to use the rider benefit for that event.

4) Rated/Non-Standard Policy

If your policy was issued at a higher premium (loading charges) due to health or lifestyle reasons, you may not qualify for the rider. Only standard lives are typically eligible.

5) Event Not a Qualifying Milestone

Only specific events (marriage, childbirth, home purchase) are eligible. Other milestones, such as getting a job, a pay raise, increased rent, or an EMI burden, and parents becoming dependent, won't qualify.

6) Insurer-Specific Terms

Each insurer has unique exclusions and rules for the rider. Always check policy documents for complete details. 

Are There Any Other Ways to Increase My Term Cover?

Yes, you can increase your term insurance coverage through multiple flexible options. 

1) Buy Another Term Plan

You can purchase a new term insurance policy to increase your overall cover, provided you declare all existing policies and meet eligibility requirements. Approval will depend on your current age, medical history, and the insurer’s underwriting norms.

For more details, read our article on multiple term insurance plans. 

2) In-Built Increase Feature

In an increasing term insurance plan, your cover automatically grows at fixed intervals.  Insurers like HDFC Life and SBI Life offer this benefit in their term plans. Depending on the insurer, this could mean a 5% increase every year or a 10% increase every 5 years, until the cover doubles or the policy term ends. However, you must opt for this feature at the time of purchase because it can’t be added later. 

3) Voluntary Top-Up

Certain insurers allow you to voluntarily increase your cover after completing a set period of the policy. For example, Axis Max Life Smart Secure previously offered a top-up option after one year of purchase. Existing policyholders can still use this feature, but the plan itself is no longer widely available and is now sold only through select channels.

Ditto’s Take on the Life Stage Benefit Rider in Term Insurance

Life stage benefits in term insurance are undoubtedly a great perk. That said, our strong recommendation is first to use our free term insurance calculator to compute the ideal coverage you need today. This ensures you lock in the lowest possible premium from the very beginning, without over- or under-committing.

If you’re still uncertain about future family or financial plans, opting for a term plan with a life stage benefit can serve as a safety net to help you increase coverage later.

Keep in mind that life stage upgrades often come with conditions: they may require fresh underwriting, the premium at that stage will be higher, and insurers usually cap the maximum increase allowed.

Ultimately, the smarter approach is to calculate your protection needs upfront by factoring in inflation, ongoing expenses, and outstanding loans.

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Is Life Stage Benefit Rider Worth It?

The life stage benefit rider in term insurance is a lucrative add-on to have in your policy. While the addition of this benefit won’t cost you anything, you will surely be looking at higher premiums once it is activated. So, it would be preferable to have a buffer sum assured added to your base cover from the very beginning.

Still unsure? Speak to a Ditto advisor; they’ll help you decide if it’s the right fit for your long-term goals.

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