The LIC Tech Term Plan is a pure term insurance plan from Life Insurance Corporation of India (LIC) that provides financial protection to the policyholder’s family in case of his/her untimely death. It is one of the most affordable term plans in the market that offers comprehensive coverage at economical premiums.
Like most term plans, the LIC Tech Term Plan pays out the sum assured to the nominee in case of the policyholder’s death during the policy term. However, it does not offer any cover in case of death due to an accident. This is where the Accident Benefit Rider comes into play.
What is an Accident Benefit Rider?
An Accident Benefit Rider, also known as an Accidental Death Benefit Rider, is an additional coverage that can be added to the base term plan. It provides extra financial compensation to the nominee if the policyholder’s death occurs due to an accident.
The rider pays out the rider sum assured over and above the base sum assured of the term plan in case of accidental death. This enhances the total protection offered to the family in case of the breadwinner’s untimely demise.
Accident benefit riders are usually optional and involve an additional cost over the base premium. However, they offer enhanced safety net to the family at a small extra price.
Key Features of LIC’s Accidental Death Benefit Rider
LIC offers the Linked Accidental Death Benefit Rider to augment the coverage of Tech Term Plan. Here are some of its key features:
Coverage till age 80 years – The accidental death benefit remains active throughout the policy term as long as the insured is under 80 years of age.
Choice of rider sum assured – The customer can choose a rider sum assured between ₹10 lakh to ₹50 lakh, in multiples of ₹10 lakh.
Double payout for specified incidents – In case of accidental death due to specified incidents like a road accident, air accident, train accident etc., twice the rider sum assured is payable.
Option to extend coverage after policy term – The rider can be extended for 5 more years after the base policy term ends, until the insured attains age 80 years.
Tax-free death benefits – The payouts under the rider death benefit rider are exempted from income tax under Section 10(10D) of the Income Tax Act.
No medical tests required – The rider can be availed without any medical tests up to the age of 50 years.
How Does the Accident Benefit Rider Work?
Here is how the LIC’s Accident Benefit Rider works in case of the policyholder’s accidental death:
In the unfortunate event of death of the insured due to an accident during the policy term, the nominee will receive the base sum assured as well as the rider sum assured.
For instance, if the base sum assured is ₹1 crore and the rider sum assured is ₹25 lakh, the total claim received would be ₹1.25 crore.
If the accidental death has occurred due to specified perils like a road accident, air accident, train accident etc., the nominee gets twice the rider sum assured, i.e., 2 * ₹25 lakh = ₹50 lakh, in addition to the base policy benefit of ₹1 crore.
Therefore, the total claim paid out would be ₹1 crore + ₹50 lakh = ₹1.5 crore.
The coverage continues throughout the policy term until age 80 years, as long as the rider premium is paid regularly along with the base premium.
If the insured survives the policy term, no rider benefit is payable. However, the insured has the option to extend the accidental cover for 5 more years.
Who Can Purchase the Accident Benefit Rider?
The Linked Accidental Death Benefit Rider can be purchased by any individual who fulfils the following eligibility criteria:
The minimum entry age is 18 years and maximum is 65 years.
The maximum coverage under the rider is up to age 80 years, subject to payment of premiums.
The rider can only be taken along with the base LIC Tech Term Plan. It cannot be taken as a standalone policy.
The rider sum assured cannot exceed the base sum assured.
The rider can be purchased for policy terms of 10, 15, 20, 25, or 30 years.
For minors below 18 years, the rider can only be taken by the parent/legal guardian.
How Much Does the Accident Benefit Rider Cost?
The premium for LIC’s Accidental Death Benefit Rider depends on various factors like:
- Age of the insured
- Rider sum assured
- Policy term
- Occupation of the insured
- Lifestyle habits like smoking
Indicative rider premium for a healthy non-smoker male aged 30 years is shown below:
| Rider Sum Assured | 10-year Policy Term | 20-year Policy Term | 30-year Policy Term |
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