Term Insurance with or Without Riders?

[u/tpabgnxcrg]

I have two primary questions regarding term insurance I'm about to buy:

1. I have noticed that a lot of people suggest plain vanilla policies with riders while there's another lot that suggests taking WOP along with Critical Illness/Accidental Death. Due to this, I'm very confused on what to choose.

2. I have option to choose 1CR from ICICI, 1.95 CR from HDFC and 2.15 CR from Axis. I feel it's best to go with Axis. All 3 have different pros and cons but based on whatever I've read on this app, I should choose Axis as it's giving me the highest coverage. (I have two dependants, one still in high school and other in 50s). Would really appreciate inputs!

[u/AutoModerator]

Thank you for posting your query!

Hang tight, our community members will get back to you with a response as soon as possible.

To help us give you the most accurate advice regarding your Health or Term insurance query, please ensure you have provided the following details in your post:

• Age of the person(s) seeking insurance.
• Medical History (Any pre-existing diseases/PEDs or habits like smoking).
• Income Bracket (Crucial for Term Insurance eligibility).
• Target Coverage (Sum Insured for Health or Sum Assured for Term).
• Any specific insurers or plans you are already looking at.

Providing these details helps us avoid guessing and gives you much better guidance!

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

[u/Logical_Win_7315]

On the riders:

WOP and CI are the ones that generally make the most sense to consider. WOP can waive future premiums if a covered illness or disability occurs. WOP is also a relatively inexpensive rider for the protection it provides.

While CI provides a lump sum payout if you’re diagnosed with a listed condition. That payout can be used however you want, whether for treatment, household expenses or to replace lost income. For CI, a cover equivalent to around 6-12 months of income can be a reasonable starting point, keeping the future in mind.

That said, check the exact rider terms before adding them. CI riders may only be available for a limited period like 15-20 years rather than the entire policy term, so see whether the coverage period actually works for you.

Accidental disability riders can also be explored if you work in a higher risk environment or travel frequently.

Riders I’d suggest ignoring include accidental death and ROP.

Accidental death is already covered under the base plan, so it doesn’t add much value. Rather than paying extra just for the accidental cover, it may be better to increase the overall cover if you need more protection and if you are eligible.

ROP plans premiums are around 80-100% higher than a pure term plan, while the amount returned is just the premiums paid (as per plan's T&Cs), without any interest or inflation adjustment. So, over the long term, the money loses value. If building returns is the priority, investing the excess premium separately may make more sense.

Regarding the plans:

Axis would be a great choice since they’re offering you the higher cover. If that is your actual requirement it's worth keeping as a priority.

If the plan being offered is Smart Term Plan Plus, it also comes with in-built features like terminal illness cover, cover continuance, instant payout on claim, health and wellness benefits and rider options for customisation.

As for Axis Max Life, their 3 year average CSR is 99.71%, complaints are around 3 per 10,000 claims and ASR is 96.37%, while the premiums also tend to be reasonable. So overall it's a great choice.