In India, hundreds of people lose their lives in road accidents every day. Life is so unpredictable, that we don’t know for sure what might happen to us in the next moment. As the head of the family, the onus of protecting one’s family lies on our shoulder. Many of us invest in term insurance plans. Nevertheless, there are many other risks in one’s life where simply having a life insurance policy may not prove to be of much aid. Especially, if there is a serious accident, the family has to bear the treatment expenses.
In critical situations like these, Riders come in very handy. Riders are add-on schemes that can be added to a vanilla policy, that may be a unit-linked plan, term policy or an endowment plan. They are not attached to the insurance policy and are completely optional.
However, when added to the policy, at the time of occurrence of a particular event, they give a financial cover which is over and above the sum assured. In simple words, Riders conditional additions that help an individual in enhancing his insurance coverage and making it more extensive and powerful.
Life insurance companies give many options that make even a basic insurance policy more meaningful and substantial. They allow the policyholder to customise his insurance policy so that they suit his particular needs.
The death of the breadwinner can cause extreme stress to the bereaved family. But death in an accident can leave the family members in a devastating financial crisis. The sky-high medical expenses and an indefinite loss of income are not just a financial but a big emotional trauma as well.
Since accidents do not come with a warning, the death of the insured by an accident comes as a shock. So, the additional sum insured by way of Accidental Death Benefit rider comes handy to meet the immediate expenses of the family.
LIC’s Linked Accidental Death Benefit Rider is one such rider, that may be attached as per the needs of the Life Assured. LIC clearly defines an Accident, “An Accident is a sudden, unforeseen and involuntary event caused by external, violent and visible means.”
If the individual meets with an accident while the policy is in force, and he dies within a period of 180 days of the accident, LIC would pay an additional sum over and above the death benefit to the appointed nominee.
However, it should be kept in mind that the policy must be active when the accident takes place, even if it is not at the time of death.
LIC’s Linked Accidental Death Benefit Rider is not available on the life of minors, till the time they are 18 years of age, on the receipt of a specific request made by the policyholder. The request will be processed if only considered eligible by LIC as per the underwritten rules.
LIC’s Linked Accidental Death Benefit Rider can be added to at the time of policy inception of later at any policy anniversary. But, it should be either on or before the anniversary nearer to the insured individual’s 65th birthday, which is subject to a minimum term of 5 years for the rider. Also, the rider cover would be available only till the time the policy matures or till the time the insured turns 70, whichever date is earlier.
When the rider is attached to a policy, the policyholder can cancel it at any time he wishes. It should be remembered that once a rider is terminated it cannot opt again during the entire term of the policy.
When the base policy is not active, LIC’s Linked Accidental Death Benefit Rider is also terminated and no charges are applicable. Though the rider can be revived with the policy, this cannot be done in isolation.
The cost of LIC’s Linked Accidental Death Benefit Rider that is charged at the commencement of each policy month, by the cancellation of a relevant number of units from the policyholder’s fund value. A charge at the rate of INR 0.40/thousand rupees of the Sum assured of Accidental Benefit annually is levied. In case the individual is serving in a police organisation then the yearly charges are levied at a rate of INR 0.80/thousand rupees of the Sum assured of Accidental Benefit.
If the death of the individual is due to the reasons mentioned below, the accidental death claim might not be admissible:
With the help of an illustration, it would be easier to understand how LIC’s Linked Accidental Death Benefit Rider works.
Let us suppose, Arjun is a 26 years old married man with two children. His annual income is INR 3,60,000. He has a life insurance policy of 25 lakhs, along with which he has the Accidental Death Benefit Rider of INR 10 lakhs. In an unfortunate accident, Arjun meets a serious accident. He is admitted to a hospital, but even after weeks of treatment his condition does not improve and he dies.
The hospitalisation charges amount to over INR 5 lakh. Now, when the family claims the death benefit, though they have entitled to a death benefit of INR 25 lakhs, with the Accidental Death Benefit Rider, the amount the family receives would be INR 35 lakhs.
LIC’s Linked Accidental Death Benefit Rider is a valuable addition that can really enhance any Life Insurance policy by LIC. Apart from the fact that LIC is the most-trusted insurance company in the country, the rider can help you and your family in tough times.
Riders are add-on schemes, offered by Insurance Companies, that can be added to a vanilla policy, that may be a unit-linked plan, term policy or an endowment plan. They are not attached to any particular insurance policy and are completely optional. However, when added to the policy, at the time of occurrence of a particular event or a mishap, they give a financial cover which is over and above the sum assured.
The Accidental Death Benefit Rider is a clause or an add-on benefit that can be added to the base policy. It is the payment that is received by the nominee if the insured individual dies in an accident or due to an accident.
LIC’s Linked Accidental Death Benefit Rider allows the policyholder to customise his insurance policy so that they suit his particular needs. Death of a family member can have a deep mental effect on the entire family and death in an accident can be extremely traumatic. An extra financial cover may help the family in making the ends meet after the death of the breadwinner.
LIC’s Linked Accidental Death Benefit Rider is not available on the life of minors, till the time they are 18 years of age, on the receipt of a specific request made by the policyholder.
LIC’s Linked Accidental Death Benefit Rider will continue till the time the base policy continues. So, as long as you pay for your insurance policy, you need to pay for the Rider as well.
LIC’s Linked Accidental Death Benefit Rider does not function in isolation, it will not continue once your policy matures or expires.
The exclusions are as under:
The death has been because of self-inflicted injury, attempted suicide, mental derangement or under the influence of alcohol or drugs or has been because of the individual participated in riots, rebellion, civil commotion, steeplechasing, invasion or any adventure sport such as river rafting, mountaineering, parachuting, etc. Or the death is caused while the insured was committing a criminal act. Or the insured has died due to employment in armed forces or the army. Or if the death of the insured takes place after 180 days of the accident.
The premium amount paid under LIC’s Linked Accidental Death Benefit Rider is tax exempted under Section 80C of the Income Tax Act.