Maximizing Your Insurance: The Benefits of Adding a Critical Illness Rider to Term Insurance

A critical illness rider is an add-on rider that comes with term insurance covering the costs of treatments required for the diseases mentioned in the policy. The most widespread life-threatening diseases include cancer, stroke, heart attack, kidney failure, and other critical illnesses. With this option, one can claim the sum assured amount when a critical illness is diagnosed. This payout money can then be used to pay the doctor fees, medical expenses, ambulance charges, etc.

To get better clarity, let us first Define Term Insurance. It is a type of pure risk coverage for life insurance, which provides financial protection to the family of the policyholder. This benefit can be availed against a fixed amount of premium for a specific tenure. The nominee will receive the amount of insurance in the event of the policyholder's unfortunate death.

One must have a critical illness rider due to the mentioned reasons:

• It is a replacement for income.
• The premium stays the same; hence, there is no need to spend an extra penny by the policyholder.
• Avail double tax benefit.
• Get an add-on coverage to meet medical expenses.
• It covers diseases like cancer, heart attack, paralysis, bypass surgery, kidney failure, etc.

Things to Be Considered while Buying Critical Illness Rider

• If the maximum tenure of the term insurance plan is 30 years, then the coverage will continue even after claiming the benefit.
• The taxes u/s 80C and 80D of the Income Tax could be saved.
• The amount of benefit payable will be equal to the cover of critical illness that a policyholder has opted for.
• The total amount of the sum assured under this plan will be payable in case of sudden demise or permanent disability of the insured.
• There will be no survival period, and the benefit will be paid immediately on the basis of the diagnosis itself.
• The claim amount would be settled within 21 days of the receipt of all required documents.
  One can avail of the policy online and pay a premium for instalments.

What are the Critical Riders in Term Insurance Plans?

In Term Insurance, the critical illness riders are valuable riders that extend funding to the policyholders in the event of being diagnosed with one of the critical ailments listed by the term insurance provider in the policy document. The two types of critical illness riders are:

• Standard critical illness riders: Here, a policyholder receives a substantial amount over and above the sum assured when diagnosed with any of the listed critical diseases.
• Accelerated critical illness riders: Here, a policyholder receives access to the fund that can be used at the discretion if diagnosed with a critical ailment. The funds received are a part of the base coverage amount, which means the beneficiary should expect a reduced amount in case the insurer disburses the death benefit.

Diseases Covered in a Term Insurance with Critical Illness Riders

Provided below is a list of diseases covered in a Term Insurance with Critical Illness Riders:

• Angioplasty
• Heart Valve Surgery
• Myocardial Infarction
• Open Chest CABG
• Cancer
• Blindness or Deafness
• Muscular Dystrophy
• Head Trauma
• Bone Marrow Transplant
• Chronic Liver Disease
• Neuro Diseases with permanent symptoms
• Aplastic Anaemia
• Brain Tumour
• Coma
• StrokeParalysis
• Lung Failure
• Major Burns
• Kidney Failure
• Poliomyelitis
• Loss of Limbs
• Parkinson's disease

Eligibility Criteria of a Critical Illness Rider

Mentioned below are the eligibility criteria to be met for Critical Illness Insurance:

Documents Required 

Provided below is the list of documents required to claim the Term Insurance with a critical rider:

• Duly Filled-in claim form
• Original Policy documents
• Pre and Post hospitalisation records
• Medical reports with a diagnosis of covered critical illness
• Medical reports with attending medical practitioner’s certificate
• Copy of cancelled cheque or bank statement

Who Should Buy a Term Insurance with Critical Illness Rider?

Provided below is a list of people who can consider buying the term insurance with critical illness benefits: 

• Self-Employed Individuals 

Term insurance with a critical rider is helpful for self-employed individuals who may not have enough savings to spend on medical expenses and whose work profile is unpredictable.

• Individuals with Limited Savings

Term insurance with a critical rider is helpful for individuals who have lesser savings. It will help them meet medical emergency-related expenses and fulfil their financial goals.

• Individuals with a Family History of Critical Illness

Term insurance with a critical rider is helpful for individuals who have a family history of illness and are more prone to family conditions. It will provide the individuals with the peace of mind and the support required.

• Family Breadwinners with dependents

Term insurance with a critical rider is helpful for individuals who are the breadwinners of the family. They have varied financial responsibilities, which can be met by critical illness benefits.

• Individuals above 40

Term insurance with a critical rider is helpful for individuals who are over 40 years of age and more prone to suffer from critical illness diseases.

How to Buy a Term Insurance with Critical Illness Rider?

There are two ways to buy term insurance with a critical illness rider:

A) Online Mode:

• Visit the website of the insurer company.
• Apply for a term insurance plan with a critical rider.
• Fill out the online application form.
• Submit the relevant documents.
• Pay the premium amount via any of the digital modes that an insurance company has allowed.
• Submit the application.
• The insurance application will be processed, and coverage will be allowed.

B) Offline Mode:

• Visit any nearest branch of the insurance company.
• Speak to an insurance agent.
• Fill out an application form.
• Upload the required documents and pay the premium amount.
• Submit the same to the insurance company to underwrite it and issue the coverage amount.

Conclusion

In today’s world, there is a lot of stress due to a hectic schedule; everyone is prone to critical diseases like heart attack or cancer before reaching the age of 70 years. The treatment of these critical illnesses might become a huge financial burden on the family as their treatment costs range from lakhs. One should, hence, opt for term insurance with critical illness riders in India, which could be of great help in the long run.