Critical Illness Rider

A Critical Illness rider is an optional life insurance coverage, which insures you against serious and life-threatening illnesses such as cancer, heart attack, lung failure, liver failure, etc. On diagnosis or death due to any of the mentioned critical illnesses, the rider sum assured is paid by the insurance company. Different life insurers may have a different number of critical illnesses covered under the rider.  You can opt with any life insurance plan such as term life policy, endowment, ulip plan, etc.

Features of Critical Illness Rider

A critical illness rider generally comes with the following features - 

1. Critical Illness Covered: The number of critical illnesses covered can range from 13 to 40 diseases depending upon the chosen insurance company. Generally, all critical illness riders provide coverage for cancer, CABG, liver transplant, loss of speech, and blindness.
2. Sum Assured: The minimum rider sum assured usually begins from INR 10,000 and can go up to INR 50 Lakh or more subjected to underwriting. However, the maximum rider sum assured cannot exceed the maximum base plan’s life cover.
3. Entry Age: Individuals as young as 18 years can opt for this rider. The maximum entry age is restricted to either 60 years or 65 years by different insurance providers.
4. Waiting Period: You can only avail of the benefit under this rider after the waiting period ends, which is usually 90 days from the date of policy receipt.
5. Policy Payment Term & Mode: The rider usually features a minimum term of 5 years and a maximum term of 25 years. Some insurers require the rider term to be consistent with the base policy term. The rider premium payment mode shall be the same as the base plan.

Benefits of Critical Illness Rider

The benefit under this rider is generally paid as a 100% sum assured lump sum on the first diagnosis of any of the covered critical illnesses. However, some rider plans also offer periodic payments which can be distributed over a certain number of years. In both cases, after the rider benefit is paid, the base policy still continues till the policy term. It is essential to check the rider details as some insurers may have a clause that life assured survives at least 30 days after the first diagnosis.

How Critical Illness Rider Works?

Let’s understand the working of this rider with the help of an example - 

A lump sum of INR 30 Lakh will be paid to Mr. Banerjee on the first diagnosis of any of the listed critical illnesses.

Critical Illness Rider Exclusions

Following is the list of common exclusions under this rider - 

1. Any Illness, sickness, or disease other than those specified as a critical illness under the rider plan
2. Pre-existing diseases
3. Diseases contracted before the expiry of the waiting period under the plan
4. Congenital conditions
5. Any critical illness caused due to intentional self-injury, suicide, or attempted suicide
6. Venereal diseases (STDs)
7. Diseases caused due to nuclear contamination or war
8. Any critical illness caused due to treatments received in nature cure clinics, health hydros, spas or similar establishments
9. Any critical illness caused by birth control, sterility, and infertility procedures

Who Should Buy a Critical Illness Rider?

The following set of people are recommended to get a Critical Illness rider with their base life insurance plan - 

1. People with a family history of critical illnesses
2. People who are in their 30’s
3. People living in areas with poor air quality or high pollution
4. People with demanding work-life which often involves stress and anxiety
5. People with poor BMI.