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Term Insurance with Critical Illness Cover
Critical illnesses are life-threatening diseases in which the risk of imminent death is high, such as cancer, a heart attack, a stroke, Etc. However, an unhealthy lifestyle leads to diseases, causing critical illnesses. There's no doubt that critical illnesses strain not only your health but also your finances. With term insurance, critical illness rider coverage secures policyholders by offering a lump sum amount in case the insured person is diagnosed with a listed critical illness.
In addition to this, you can add a critical illness rider to your existing plan and obtain the rider sum assured in exchange for a nominal additional premium. Learn more about critical illness riders and the best term insurance offering critical illness coverage in India.
What is a Critical Illness Rider?
Critical Illness Rider is an optional add-on benefit that you can add to your base term insurance policy. The rider covers all the listed critical illnesses in your term plan. Once any of the mentioned critical illnesses is diagnosed the rider comes into effect and provides the sum assured to the policyholder as a lump sum.
The Critical illness rider is added to a term insurance policy at the time of purchase and it comes at a very nominal cost which amounts to 800-1000 INR annually.
Disease Covered Under a Critical Illness Rider
Critical illness doesn’t just happen to others who are living unhealthy lifestyles. It can happen to you, too, if there have been critical illness diagnostics in your family.
Hence, getting the critical illness rider is an excellent option to gain comprehensive coverage. Under this add-on rider, you can get cover against the diagnosis of listed critical illnesses. Please note that the list of critical conditions covered may vary from insurer to insurer.
| Alzheimer's Disease | Aorta Graft Surgery | Aplastic Anaemia |
|---|---|---|
| Brain Surgery | Cancer | Chronic Lung Disease |
| Coma | Encephalitis | Loss of Independent Existence |
| Loss of Speech | Major Burns | Major Organ/ Bone Marrow Transplant |
| Motor Neurone Disease with permanent symptoms | Muscular Dystrophy | Coronary artery by-pass grafts (with surgery to divide the breastbone) |
| Permanent Paralysis of limbs | Primary Pulmonary Arterial Hypertension | Systemic lupus Eryth. w. Renal Involvement |
| Angioplasty | Apallic Syndrome | Benign Brain Tumor |
| CABG (Coronary artery bypass graft) | Cardiomyopathy | Chronic Liver Disease |
| Deafness | Heart Valve Surgery | Loss of Limbs |
| Kidney Failure (End Stage Renal Failure) | Major Head Trauma | Medullary Cystic Disease |
| Multiple Sclerosis with persisting symptoms | Myocardial Infarction (First Heart Attack) | Parkinson's Disease |
| Poliomyelitis | Stroke resulting in permanent symptoms | Total Blindness |
How Does Term Insurance With Critical Illness Work?
Here is how you can avail the benefits of a Critical Illness Rider
- Add the critical illness rider while purchasing your term policy. You will see the option of adding riders to your base plan.
- If diagnosed with a listed CI during the policy tenure, submit a diagnosis report signed by your doctor to the insurer.
- The insurer will pay the sum assured in lump sum and the policy will come to an end.
- Use the lump sum to get the treatment of your critical illness.
Perks of Term Insurance with Critical Illness Rider
The insurance provider offers policyholders the flexibility to add riders to an existing plan at a nominal cost to ensure extra protection. These riders are undoubtedly helpful, especially if your family has a medical history of critical illnesses. Here, we've listed benefits associated with Term Insurance with Critical Illness riders.
-
Income Replacement
If you get diagnosed with one of the Critical Illnesses and lose the ability to work, the Critical Illness Rider can serve as a temporary source of income while you are undergoing treatment. These riders offer a wide range of flexibility, wherein you can utilize the funds received to serve different needs i.e. hospitalisation or non- hospitalisation. -
Better Chances of Survival
With the cost of medical treatment running up to lakhs and lakhs of rupees, it is nearly impossible for an average middle-class household to cover the treatment expenses. As a result, you will often see families give up on the treatment process. Sum Assured with Critical Illness Rider allows you to get access to proper diagnosis and quality treatment, and in turn, improve your chances of survival. -
Immediate Payout Post Diagnosis
A very important reason to consider opting for this rider is that you do not have to wait for the Sum Assured till after the treatment. This essentially means that you are entitled to receive the full amount assured under the rider, right after being diagnosed with the Critical Illness. This eliminates the need for you to pay out of pocket for the treatment or hospitalization expenses that you will incur as a result of it. -
Protection against Medical Inflation
Medical inflation rose from 3.8% in December 2019 to 7.7% in June 2021*. This has been a growing case of concern given that nearly half of the population in India loses out on quality care as a result of it. Therefore, you should give this rider some serious consideration, more importantly if you have a family history of any of the Critical Illnesses. -
Tax Benefits
The premiums paid towards a Term Plan are eligible for Tax Benefits under Section 80C of the Income Tax Act, 1961. Up to Rs. 1.5 Lakhs is deductible from your taxable income with Term Insurance. Further, the benefits received are exempt under Section 10 (10D) of the Income Tax Act. -
Additional Coverage against Medical Expenses
The Critical Illness Rider can prove to be particularly helpful if you are also covered under a Health Insurance Policy. With the combined coverage of both the policies, you are more likely to be able to afford the best of treatments against serious illnesses without burning a hole in your pocket.
Eligibility Criteria of a Critical Illness Rider
Critical illness riders come with a waiting period, which is usually 90 days. Check the Terms & Conditions with your respective insurer, as they may vary from company to company. Let's take a look at the eligibility criteria for critical illness coverage:
| Criterion | Minimal | Maximum |
|---|---|---|
| Entry Age | 18 years | 65 years |
| Sum Assured | Minimum Sum Assured of your term policy. | Maximum Sum Assured of your term policy. |
| Waiting Period | It comes with a waiting period of usually 90 days. | |
| Premium Payment Term | Regular, Limited, or Single Pay | |
| Premium Payment Mode | Same as the base term plan | |
Compare Best Term Insurance Plans with Critical Illness Cover
The following table presents a few examples of Best Term Insurance policies that offer the Critical Illness Rider.
| Insurance Company | Term Plans | Critical Illness Benefit |
|---|---|---|
| PNB MetLife | PNB MetLife Mera Term Plan Plus | Coverage against 50 Critical Illnesses |
| Max Life | Max Life Smart Term Plan | Coverage against 64 Critical Illnesses |
| HDFC Life | HDFC Life Click 2 Protect Life | Coverage against 19 Critical Illnesses |
| Bajaj Allianz | Bajaj Allianz Life Smart Protect Goal | Coverage against 55 Critical Illnesses |
| SBI Life | SBI Life – Poorna Suraksha | Coverage against 36 Critical Illnesses |
| ICICI Pru | ICICI Pru iProtect Smart | Coverage against 34 Critical Illnesses |
Conclusion
Healthcare facilities costs are forever rising and thus are increasing the treatment costs of life threatening illnesses. Because of this, it becomes very important to take all the necessary steps to be prepared for critical illnesses if you suspect them happening to you due to your family history, your lifestyle, or the kind of work that you do. Undoubtedly, critical illness coverage financially empowers you to manage the treatment costs of several life-threatening diseases and gives you a sense of being prepared to fight them.
Term Insurance with Critical Illness Rider: FAQs
1. What is a Critical Illnеss Ridеr?
A Critical Illnеss Ridеr is an optional add-on to a tеrm insurancе policy that offеrs financial protеction if thе insurеd pеrson is diagnosed with a spеcifiеd critical illnеss.
2. What critical illnеssеs arе typically covеrеd by this ridеr?
Thе spеcific illnеssеs covеrеd can vary, but common еxamplеs includе heart attacks, cancеr, coma, kidnеy failurе, strokе, and morе.
3. How doеs thе ridеr providе financial support?
It providеs a lump-sum payout upon diagnosis, which can be used for mеdical bills, spеcializеd trеatmеnts, rеhabilitation, and othеr еxpеnsеs, including daily living costs.
4. Doеs thе ridеr affеct thе basе tеrm insurancе policy?
No, thе Critical Illnеss Ridеr opеratеs indеpеndеntly of thе basе policy. It doesn& 039;t impact thе basе lifе insurancе covеragе, and thе dеath bеnеfit rеmains payablе to bеnеficiariеs.
5. Is thеrе a waiting pеriod for claiming thе ridеr bеnеfit?
Yеs, thеrе is usually a waiting pеriod (oftеn 90 days) after diagnosis bеforе you can claim thе ridеr bеnеfit. Bе surе to chеck your policy for specific tеrms.
6. Why should I consider adding a Critical Illnеss Ridеr to my tеrm plan?
Critical Illnеss Ridеrs providе additional financial protеction against high mеdical еxpеnsеs, offеr incomе rеplacеmеnt during trеatmеnt, and protеct against rising mеdical inflation.
7. How can I avail thе bеnеfits of thе Critical Illnеss Ridеr?
Upon diagnosis of a critical illness, you nееd to submit a diagnosis rеport signed by a mеdical practitionеr. Aftеr vеrification, thе insurancе company pays out thе lump sum, which can bе usеd for trеatmеnt-rеlatеd еxpеnsеs.
8. What are thе еligibility criteria for buying Critical Illnеss Insurancе Covеr?
Thе minimum еntry agе is typically 18 yеars, and thе maximum agе for adding thе ridеr to your tеrm insurancе is usually 65 yеars. Prеmiums arе thе samе for both gеndеrs whеn purchasing a basic tеrm insurancе plan.
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Written By: Varun Saxena
I am a passionate content writer with over three years of experience in the insurance domain. An avid learner, I always tries stays ahead of the industry's trends, ensuring my writing remains fresh and includes the latest insurance shifts. Through my work, I strive to engage with targeted insurance readers.
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