Term life insurance is a protection plan that offers coverage for a stipulated period. Since it can be a contract between you and your insurer for a fixed time, you might not be able to receive or increase the benefits based on your convenience. However, the times have changed today as many insurance companies give you the opportunity to increase the term coverage after entering a new stage of your life, such as marriage, parenthood, and so on. The term policy that can allow you to increase its sum assured amount to protect each milestone of your life can be called an increasing term plan. Therefore, let’s understand the meaning and features of a term policy in detail:
What is increasing term coverage?
As the name suggests, increasing term coverage can allow you to extend your selected sum assured amount at the time of purchase. When your financial needs increase after crossing specific life stages, such as marriage, the birth of a child, and so on, you should increase the term cover. With increasing term coverage, you can safeguard your loved ones from uncertainties that can arise at any stage of life.
Apart from increasing term coverage, you can also enhance your base term policy with riders. Term insurance riders can play a significant role throughout the tenure of the policy. Riders are additional benefits provided by your insurer to ensure that you receive coverage during circumstances, such as critical illness, physical disability, and so on.
Although riders are a crucial aspect of term insurance policies, it might depend from company to company. However, see to it that you understand each type of rider provided by your insurer before you buy increasing term coverage to protect each milestone of your life. Therefore, let’s go through the most common types of riders offered by every insurer that can enhance your term coverage:
- Critical illness rider
As you grow older, the chances of suffering from critical illnesses, such as cancer, stroke, kidney failure, and so on, can increase. To treat such life-threatening health conditions, you might require a critical illness rider that can provide you with financial backup. A critical illness rider can cover the hefty medical bills without burning a hole in your pocket.
- Accidental death rider
The rapid growth of uncertainties can take a toll on your physical as well as your financial health. If anything happens to you during an unfortunate event, your family members might suffer financially as well as mentally. Under such a scenario, an accidental death rider can offer you with a sum assured and additional payout to look after your needs.
- Physical disability rider
During a gruesome incident, you might either be partially or temporarily disabled, which can lead to loss of body parts, such as a limb, eye, arm, and so forth. When you are physically disabled, you might not be able to pay your premium on time. However, if you have a physical disability rider along with an increasing term cover, your insurer can either waive the premium off or provide you with a financial payout under such a scenario.
- Waiver of premium rider
Although term life insurance can allow you to pay the premium based on your convenience, you might struggle to pay the premium within the stipulated duration due to an unfortunate event, such as a loss of income. Having a waiver of premium rider when you are struggling to make the premium payment can be beneficial. With the waiver of premium rider, you can continue to receive the term insurance benefits when your insurer waives the premium off.
To sum up, increasing term coverage can help you to stay prepared financially at every stage of your life. Moreover, it can cover your high financial responsibilities and the rise in your financial dependents. However, see to it that you do not get overwhelmed with the coverage amount, consider the financial requirements of your family during that particular stage first. For instance, if you have children, consider their routine and educational needs. Based on that, increase the term insurance coverage of your selected policy and incorporate the relevant riders to strengthen your cover.