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Is it Worth Buying Disability Rider on Term Insurance?

Purchasing a permanent disability rider is a great way to cover the expenses related to disability and loss of income. Click here to know whether you should buy term insurance with disability rider.

  • 7,755 Views | Updated on: Feb 27, 2024

Whenever you purchase a life insurance policy, you will be informed about riders that enhance the coverage and protection. However, have you heard about a rider that waives premium payment in case of a disability? Many individual life insurance policies include a rider, which will waive the premium upon total disability.

What is a waiver of premium?

A waiver of premium means you will not have to pay the premium amount on your policy in case of a disability. The cost of the insurance rider will depend on various factors, which include the sum assured and policy type. The rider will add a nominal amount to the premium but will give you an enhanced cover.

How does the disability rider work?

The rider will be useful in case of a temporary or permanent disability because of an accident. Many policies pay you a certain percentage of the sum assured regularly for the next five to ten years, making it an ideal income replacement mode. You need to remember that the rider will only come into force when a disability occurs due to an accident.

What will qualify as a disability?

The definition of disability will be included in your policy documents. Many insurers consider total disability as an inability to perform substantial duties related to your occupation. In addition, a disability should be due to an accidental injury. Any pre-existing conditions will remain excluded. The insurer can review the insured’s status during different time intervals and the definition of disability can change with time; for instance after five or seven years.

Should you buy a disability rider on Life Insurance?

Purchasing a rider is a great way to cover the expenses related to disability and loss of income. When you buy life insurance online, you can consider the cost of a rider and then make a decision. If you have a rider, which waives the premium, it will make a lot of sense in the long term. You will not have to pay the premium and will continue to receive regular income from the insurance company.

Read the fine print and understand what qualifies as a disability and what does not. You need to ensure that the rider works as per your requirements. Paying an additional expense will make sense when the benefit from the same outweighs the cost. It is ideal for those who would find it difficult to make premium payments when you are out of work.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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