Why it makes sense to add a disability rider to your term insurance plan

Most people associate insurance with security. After all the insurance companies that sell term insurance, they advertise that their products are carefully tailored to provide a financial cushion for your loved ones when they need it most. Death is synonymous with the loss of a loved one. The feeling of pain due to sudden death is aggravated by the sudden loss of income of the insured.

However, is term insurance coverage enough to survive the tribulations of sudden disability resulting from accident or illness? Will a simple term insurance policy do the trick, or should you supplement it with some rider benefits to help with unforeseen difficulties? You should first check whether your term insurance policy also includes disability coverage, as most online policies do not cover partial or temporary physical disability.

Some term plans purchased offline through agents offer more than just a death payout in your absence caused by the death. They take care of sudden financial needs due to accidents or critical illnesses or similar incidents. However, in order for applicants to qualify for payment, term insurance companies ensure that policyholders suffer from total physical disability, rendering them completely unable to work or earn money for their families.

Defining disability

Not all disabilities are necessarily due to an accident. Some disabilities can also stem from serious or terminal illnesses. The underlying idea is that a critical disorder poses an immediate threat to life, thereby limiting regular daily activities. These diseases include:

  • Cancer
  • Cardiac problem
  • Kidney disorder
  • Alzheimer’s disease
  • Third degree burns
  • Stage 3 liver/lung failure

Regardless of the benefits associated with the payout and the conditions that trigger that benefit, insurance companies can deny your application for disability coverage for a myriad of reasons. Insurers argue that insureds or their agents cannot claim this coverage if the former develops disability for the following reasons.

  • Any pre-existing disease or condition
  • attempted suicide
  • Injury intentionally inflicted on oneself
  • Engaging in self-destructive activities, regardless of mental health status
  • Injury or accident caused under the influence of alcohol, drugs or any other substance
  • Disability due to war, rebellion, etc.
  • How do you receive the disability rider benefit?

Most term insurance companies give their policyholders the ability to choose how they want to receive the disability rider benefit. Usually companies offer three options to choose from

  • The entire benefit payment in a single payment
  • The benefit payment is regular income throughout the term of the designated policy.
  • The benefit would be paid for the term period until the survival of the policyholder’s spouse.

Policyholders can also choose to receive the benefit payment as a combination of a lump sum and regular income for the pre-determined income period, say 10 years.

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