There is one death every four minutes due to a road accident in India. Life indeed is unpredictable.Cover yourself.
A report by the National Crime Records Bureau in India highlights that over 137,000 people were killed in road accidents in 2013 alone.
Incidents of reckless driving and uncertain terrains have made every day travel risky. Road accidents often lead to death or permanent disability and insuring yourself against accidents is indeed a sensible option.
Most insurers offer additional coverage that can be availed along with the base policy. These are called riders. The Accidental Death Benefit (ADB) rider is one of them. Though riders provide additional coverage at a low cost, only 15-20 percent of people who buy insurance opt for riders. This is largely due to the lack of awareness.
Let us see how this rider can benefit you.
Accidental Death Benefit Rider – What does it cover?
ADB rider covers you against the financial risk from a death due to an accident. This is in addition to the sum assured by your existing life insurance policy. In case of your unfortunate death due to an accident, the sum assured under this rider will be paid to your nominee.
A rider costs much lesser than a standalone policy. IRDAI has capped the rider premium at 30 percent of the base premium. For example, an accidental death benefit cover of Rs. 25 lakhs would cost approximately Rs. 1200 (a year) when purchased as a rider along with a primary policy. The premium varies from company to company and depends on the sum assured, policy term and premium paying frequency. Some companies might also consider age while arriving at the premium payable.
The ADB rider provides additional coverage in case of accidental death, which will be over and above the base cover.
The rider premium is also eligible for tax benefit as per Section 80C of the Income Tax Act.
So the next time you buy a life insurance policy, do opt for an Accidental Death Benefit rider. Most insurance companies also allow adding riders (as per their underwriting rules) during policy anniversary in case you missed opting for the same during policy purchase.
"The question isn’t who is going to let me; it’s who is going to stop me"- Ayn Rand -
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