Life is too uncertain. You may be hale and hearty today. But, who knows, you may fall prey to the dreadly critical illness at some point of your life. Buying a life insurance plan is one of the wisest decision one could ever make in their lives. There are so many plans available today. But, opting for a term insurance plan would make sense since they offer large sum assured at a low premium. If you are reading this blog, the chances are that you have already decided to buy one for yourself. But before we go any further, are you aware of the different riders available with term plans? Riders are a way to extend the protection of your policies by adding additional benefits to the plan, apart from the basic death benefit. These can either be inbuilt in the policy or you may buy them by paying an extra premium.
There can be a host of riders to choose from. So which one should you buy?
There are relevant pros and cons attached to all sorts of riders and it completely depends on your needs, that determine which rider you should go for.
But the rider of Critical Illness is often strongly recommended since such health issues can dry out your coffers really soon. Here are the reasons why you need a critical illness rider with your term plan:
1) No Increase in Premium
The moment you apply for a term insurance plan alongwith the critical illness benefit, your premiums remain unchanged throughout the policy tenure. . The most important feature of this rider is that your premium doesn’t increase even though you get diagnosed with any critical illness. Nevertheless, your insurance company waives off any future premiums upon diagnosis.
2) Acts as Income Replacement
Since such benefits include all sorts of treatment expenses, including pre-hospitalization and post-hospitalization costs, the rider acts as a great income replacement tool. Hence, you can save a lot of expenses in the process.
3) Large Cover
The rider often comes with a large cover that is sufficient enough to take care of both medical and day-to-day expenses if you encounter any unforeseen medical emergency that falls under the purview of the scheme.
4) Covers Major Diseases
A host of major and common critical illnesses are covered under such riders. These include heart attacks, cancer, coronary artery bypass surgery, stroke, paralysis, major organ transplant (heart, kidney, pancreas), kidney failure, etc.
5) Double Tax Benefits
Although most term insurances are accompanied with tax benefits under Section 10 (10D)of the Income Tax Act. Critical illness riders offer an additional tax benefit under Section80C of the Income Tax Act,1961.
6) Lump Sum Amount
The assured amount received under this benefit often comes as a lump sum amount. Hence, payments against hospitalisation and treatment can be done easily and quickly. The sum can even be used to write off existing mortgages or debts.
7) Lasts Throughout the Policy
Critical illness rider covers the beneficiary throughout the term of the policy. Hence, long term policy-holders can have tremendous benefits since illnesses are more likely to strike in older ages.
8) Covers Lifestyle Diseases
9) No Need of Multiple Policies
Gone are the days when one had to buy a dedicated policy for every need. Such a rider removes the need to opt for a health insurance plan if your focus is to attain cover against critical illnesses only. Moreover, it also gives you the flexibility to choose a cheaper health insurance that not necessarily covers life-threatening diseases.
Features of the Critical Illness Term Plan Rider
To give you a clearer picture of how the benefits of this rider work, here are some salient features:
1) The insurer receives a lump sum amount if a critical illness is diagnosed. The illness has to be one out of the pre-mentioned health issues in the policy.
2) In certain cases, the availed amount is deducted from the assured sum of the policy and the coverage gets reduced. You are still eligible to receive the remaining amount in the future.
3) There is no minimum survival period involved and the payment is received upon the first diagnosis of the critical illness itself.
4) The amount of cover under this rider is chosen at the time of buying the policy and the same is released upon any emergency.
5) The claim can be usually settled within 21 days of the submission of all the required documents.
6) It is important to note that some policies do not cover critical illnesses that arise within 90 days of buying the cover.