Can a Term Insurance Policy be taken if one is Differently Abled?

Do you know when you buy term insurance plans, you also get the option to add insurance riders? Essentially, riders give additional benefits to the assured and his or her loved ones. You may select from the multiple add-on riders while purchasing a term plan by paying an extra premium cost. However, one such rider that is becoming important day by day is the Accidental Total and Permanent Disability Benefit Rider, and we are going to discuss that in this blog. 

Term Insurance Plans for Differently Abled Individuals 

A disability develops when an employee is unable to execute his or her duties due to a limitation in the functioning of a body part. Disability coverage differs across plans. The following are considered disabilities:

  • Loss of use of one leg
  • Loss of function in one or both hands
  • Blindness is a loss of eyesight that prevents you from seeing with your eyes.
  • Loss of hearing or inability to listen
  • Loss of speech – unable to talk due to vocal cord damage.

Note: The disability should have remained without any pause for six months.

The Accidental Total and Permanent Disability Benefit Rider provides the policyholder with this benefit if the life assured is permanently and completely handicapped as a result of an accident or any mishap that happened to them. In such a scenario, as per the terms and conditions, the life cover is paid in 10 equal payments. For example, a policyholder may get 10% of the sum assured amount each year for the next ten years. This gives the insured an income stream for the next ten years.

What are the conditions that disability insurance covers?

A term plan with a rider provides disability coverage for physical impairments such as limb, hand, and leg dismemberment, as well as hearing and visual impairment. Furthermore, the physical impairment does not need to begin immediately following the injury. Some insurers let you claim the rider for disability as of 180 days after the accident date.


What isn’t covered under the rider?

Insurers make numerous limitations to the ATPD rider benefit. You cannot claim the accidental rider if you were disabled due to the following reasons:


  • If there are any indicators of incapacity before or during the purchase of the term life insurance.
  • The benefit ceases if the life assured is diagnosed with a handicap as a result of self-harm or injury or while under the influence of drugs or alcohol.
  • Benefits are also cancelled where such impairment occurs as a result of social unrest, rioting, war, revolt, hunting, invasion, mountaineering, racing, steep colliding, bungee jumping, scuba diving, river rafting, paragliding, or other adventurous pastimes.
  • Individuals working in the paramilitary, armed forces, aeronautics, security agencies, and aviation are also not eligible for this benefit.
  • In the event that the impairment results from a harmful behaviour, such as attempted stealing.


Why Should You Add a Disability Rider to Your Term Insurance Plan?


A term life insurance plan is just for protection. This is one such plan that offers appropriate coverage at a reasonable premium rate. Adding disability coverage to a term plan allows you to increase the benefit amount without raising the premiums. You can calculate the impact using a term insurance calculator.


Let us comprehend this by an example:

You can add disability benefits of up to Rs. 25 lakhs to your 1 crore term life insurance policy. However, this benefit does not increase the primary plan’s base life coverage. Adding disability coverage to your term insurance plan helps you receive sufficient financial support in case of an unpleasant catastrophe. 

Features of Disability Coverage in a Term Insurance Plan

Now that you understand what disability insurance is and how it might help you, let us look at its features and advantages.

Financial Protection: Disability coverage should ensure that the basic amount guaranteed that comes with the base plan is paid to your family if you die during the policy period. So, the disability rider benefit does not result in the cancellation of the death benefit.

Waiver of Premium: In this case, insurers waive the premium if the policyholder encounters permanent incapacity as a result of an accident. S/he does not have to pay the future premium, and all benefits will continue to be active. If you do not have an income source, this alternative decreases your or your family’s financial burden while paying premiums.

Differently abled persons and their families can benefit from term insurance in a number of ways. 


Factors to consider before buying Term Insurance for Disabled Person

Due to the additional risk involved, insurers frequently include special terms for handicapped persons. As a result, before purchasing a plan, individuals with disabilities should get familiar with the terms of the coverage. If you are differently abled, you may need to consider the following aspects:


Coverage: You must ensure that the term life insurance policy’s coverage is adequate to assist your beneficiaries with any financial troubles that may emerge as a result of your death. Hence, check beforehand if the sum assured is enough to cover your dependents’ annual expenditures. With the help of a term insurance calculator, you will also be able to understand whether you will be able to pay the premium. 


The amount of premium to be paid: Purchasing term life insurance for handicapped persons often costs more than standard insurance. Nonetheless, be sure the premium you’ll have to pay is within your budget. You can know this with the help of a term insurance calculator so you don’t skip a payment. Additionally, you may use an online term insurance rate calculator.


Benefits of Buying a Term Insurance Policy for Differently Abled Individuals

The following are some of the benefits of term insurance:

Beneficiaries of the policyholder receive financial assistance: If the policyholder dies while the policy is in effect, it pays death benefits to the policyholder’s nominees. If the insured was the family’s single or primary breadwinner, the surviving beneficiaries may face financial trouble. Death benefits can help families get through tough times by offering a financial safety net to rely on. It can be used to repay debts left by the deceased or to cover other important expenses. 


Tax advantages: Differently abled persons are eligible for term insurance tax benefits. The premium paid by the policyholder can be deducted from their total income under Section 80C of the Income Tax Act of 1961, reducing their tax liability. Up to Rs. 1.5 lakhs of the premium is tax deductible. Furthermore, death benefits received by their nominee or beneficiary are not taxable under the provisions of Section 10 (10D) of the Income Tax Act of 1961. These tax benefits are subject to the conditions indicated in the Income-tax Act of 1961. 

Hence, Investing in term insurance can provide disabled persons with both protection and tax benefits.


At last,

As previously noted, a term plan can be upgraded to include disability coverage. To do so, you must select the accidental permanent complete disability or partial disability rider benefit for a small additional fee and get more security.

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