- Difference b/w CI and TI
- Parameters of both
- Who should buy
Difference Between Critical Illness and Terminal Illness in Term Insurance
Term insurance is a pure protection plan that has become a basic necessity for everyone. However, do you know that it can be customized for your specific requirements? Yes, you can enhance your base cover with in-built riders to protect yourself from specific conditions like accidents and life-threatening illnesses.
It is sad to spit the fact that critical and terminal illnesses have become quite common these days. While terminal illnesses are life-threatening diseases that cannot be cured with almost no chance of survival, critical illnesses can be treated completely by getting extensive medical treatment.
Both terminal illnesses and critical illnesses are covered in term insurance through riders or in-built benefits.
What is Terminal Illness Cover in Term Insurance?
Terminal illness is a life-threatening disease with no chance of survival. It may take some months for someone to pass away from a terminal disease.
Therefore, a terminal illness diagnosis can have a devastating impact on your family as well as their financial condition. The hospital bills, doctor treatments, surgeries, medications, and other expenses can burn a hole in your pocket.
To keep this at bay, if you have a family history of a terminal illness or are suspecting diagnosis due to your lifestyle you should buy a term plan with a terminal illness benefit or rider. Up on the diagnosis of the disease, the rider gets kicked in and pays a lump sum portion of the death benefit for the treatment after a survival of 30 days.
What is Critical Illness Cover in Term Insurance?
To put it simply, a critical illness can be treated, and it comes with a ray of hope for recovery. However, it can strike anyone irrespective of age, gender, or status, and without any short notice.
To get cured you've to take extensive medical treatment that can impact your financial conditions. You can prevent it with a critical illness rider, it provides financial support in case you're diagnosed with a critical disease. It allows you to claim a lump sum amount from life cover for the treatment costs of medical illnesses while you're still alive.
However, you can use the payout money to pay off ambulance charges, doctor fees, or medical expenses. You can add this rider to your base plan when buying a policy in exchange for additional premiums of up to Rs. 800 to Rs. 1000 annually.
Basic Parameters of Critical Illness and Terminal Illness
People always make the misconception that critical illness and terminal illness are the same, but it's not - it does sound the same though. Now that you know the meaning of both riders, let's understand the difference between critical illness and terminal illness with some basic parameters.
| Parameters | Terminal Illness | Critical Illness |
| Cure | Terminal illnesses have no identified cure and eventually lead to death. | Critical illness can be treated with extensive medical treatment. |
| Focus of Treatment | With extensive treatment, you can ease the terminal illness symptoms, and it'll give you extra time to spend with your family. | With medical treatment, you can stabilize your health conditions to save your life. Without proper medical treatment, it'll increase the chance of death. |
| Recovery | There are no cures or adequate treatment for terminal illnesses; it'll eventually lead to death. | Critical illnesses come with a higher chance of recovery if provided with timely medical treatment. |
| When can you claim? | You can claim if you are diagnosed with a terminal illness. The claim benefit will be provided if your medical document states that your life expectancy is less than 12 months. | You can claim a critical illness insurance benefit when diagnosed with the listed one. There is no specific life expectancy and waiting period. |
| Who should buy it? | Terminal illness benefits are a must-buy for those who have terminal disease in their family. | Critical illness benefit is a lifesaver for those who have a chance of getting diagnosed with a critical illness. |
| Life Cover in Term Insurance | Under terminal illness insurance, you can claim up to 25% to 50% of the life cover as a terminal illness benefit to pay the medical expenses. The remaining amount will be delivered to the nominee in the event of the policyholder's demise. | Under critical illness insurance, you can get an entire amount of life coverage in case of a critical illness diagnosis while you're still alive after the survival of a month. |
Critical Illness and Terminal Illness Cover: Who Should Purchase
Critical Illness
Critical diseases strike anyone, irrespective of age, gender, or status, and without any short notice. Therefore, the need for critical illness insurance benefits becomes necessary.
Are you scared to burden your family with medical expenses? Therefore, you can add critical illness insurance coverage. It helps you get a lump sum so it won't affect your family's financial condition.
Terminal Illness
In case there have been instances that your family's medical history indicates some of the members getting ill with a terminal disease, then you must add terminal illness insurance benefit to your basic term plan.
Are you the only earning member, and does your family depend on your income? If yes, you can add a terminal illness rider on your term plan to settle your dependent's financial future in case of your unfortunate demise.
Conclusion
Now you know the features & benefits of terminal or critical illness coverage, and it must be easy to understand which one best suits you. Both benefits serve different purposes. With an enhanced life cover, you can safeguard yourself from financial crises and extend a comforting hand during tough times.
Critical Illness vs Terminal Illness in Term Insurance : FAQs
1. How many times can I claim critical illness?
Under critical illness rider, you can claim only one time after getting diagnosed with one of the listed critical illnesses.
2. Is cancer a terminal or a critical illness?
Yes, cancer comes under a critical illness, and critical illness riders cover all types of cancer, irrespective of the stage you are in.
3. Is terminal illness the same as critical illness?
No, both critical and terminal illnesses are different; critical illnesses can be cured with treatment, and terminal illnesses cannot be treated with further medical treatment.
4. Which is better, term insurance with a critical illness rider or critical illness insurance?
Generally, critical illness policies end once the payout is made. But with term insurance with a critical illness rider, you can claim a lump sum amount once a year, and in the event of unfortunate demise, your nominee will get the remaining sum assured amount.
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Written By: Sahil Singh Kathait
A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.
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