Disability Rider on Term Insurance – Is it Worth Buying?

Disability Rider on Term Insurance – Is it Worth Buying?


Disability rider on term insurance provides financial assistance to the policyholder in case he/she faces temporary or permanent disability. Most insurance companies provide a part of the sum assured for the next few years.

In this article, we will explain why disability rider should be considered while purchasing term insurance.

Term insurance provides a sum assured to the policyholder’s beneficiaries in case he/she passes away untimely. Therefore, every person should consider purchasing it to secure his/her family from a financial burden. Furthermore, when an individual is buying term insurance, he/she is also offered various riders.

Riders are additional cover that a person can purchase by paying extra premium. There are various types of riders, such as the accidental death rider, the income benefit rider, etc. One such rider that people should consider buying is the disability rider.

What is the Disability Rider?

In case a policyholder suffers from a permanent or temporary disability, the insurer provides financial assistance to him/her. However, the insurer will provide cover if the disability is caused due to an accident.

Most insurance companies provide a part of the sum assured to the policyholder for the next few years. For instance, the insurance provider can provide 10% of the sum assured every year for the next ten years.

Furthermore, there are insurance companies that provide a waiver of premium in case of a disability. A waiver of premium means that the policyholder will not have to pay the remaining premium amount for his/her policy if he/she suffers from a disability.

There are various factors that affect the cost of the rider. Some of them are the policy type and the sum assured. However, the cost might not have a huge impact on the entire premium. Therefore, a person can enhance his/her cover at an affordable cost.

The policy documents will describe what will be covered in a disability. Mostly, insurance companies consider total disability as an inability to perform a significant number of duties in the policyholder’s job. Any pre-existing conditions will not be considered. The insurer can review the insured person’s condition regularly. Furthermore, the cover provided for disability might change with time and based on the status of the policyholder.

Why People Should Consider Purchasing Disability Rider

As medical expenses are rising, paying for the expenses arising due to a disability can cause a financial burden. However, by purchasing the disability rider, it can be easier for the policyholder to pay for such expenses. Furthermore, if the policyholder has a waiver of premium rider, then he/she can receive the insurance benefits without paying the premium.

What are the Other Riders That People Should Consider?

Apart from disability rider, there are other riders that are also important. Some of them are-

Accidental Death Rider

This rider offers an additional sum assured in case the policyholder passes away due to an accident.

Waiver of Premium

This rider can help a person in case he/she can’t pay the premiums of a policy due to an unforeseen situation, such as a disability. The insurer waives off the future payments of the insurance plan if a policyholder has this policy.