Term Insurance

Top 5 Reasons Why You Need Critical Illness Rider With Term Plan

Nov 16, 2021

Top 5 Reasons Why You Need Critical Illness Rider With Term Plan

Term plans are immensely popular among salaried professionals and people with dependents in their families. The term plans are highly affordable and come with flexible premium payments. They are perfect even for the families where only one person is earning.Since, it is a pure risk cover, the nominee receives the sum assured in case the life assured passes away during the policy tenure. This way, with the help of a term plan, the family and financial dependents can be assured of financial security in case of the breadwinner’s death. 

However, what if the person-insured gets cancer? What happens if he goes on life support in a hospital due to a critical illness?

As the family’s sole breadwinner, there are no other persons to rely upon. Furthermore, he was investing his money in a plan that generated benefit only after his death and that too within tenure. Now, how can the family survive, bear the treatment costs, and find some cash relief?

This is where the concept of riders enter the scenario. Let us understand how a term insurance rider works.

What is term plan rider?

A rider is a small clause attached to the usual insurance plan for increased cover. For example, a critical illness rider is attached to the term plan to cover a person during life-threatening conditions. The riders allow the person-insured to withdraw an assured sum for immediate usage. Hence, your family doesn’t face the financial crunch, and your medical bills are easily covered. 

What is the Critical Illness Rider and Why One Needs It?

The critical illness rider is an optional attachment to a term plan that covers a specific number of critical diseases and extends your cover. It comes handy in the event of a tragic health condition that is a result of a critical illness.

Apart from offering immediate cash payouts, it also offers double tax benefits and replaces the monthly income.

The critical illness rider offers a large cover so as to cover the family expenses all the while keeping your finances from drying out. The critical illnesses such as cancer, heart diseases, kidney diseases, and road accidents etc. have become extremely commonplace

The critical illness benefit allows you to have a lump sum in any medical emergency, in addition to any other medi-claim or health plan benefit. It covers you during the treatment and recovery period.

So, you have sure-shot financial support to rely upon in the time of need!

Premium calculation for Critical Illness rider and Term plan bundle

The premium amount doesn’t change if you attach the critical illness rider with your term plan. Hence, the premium amount remains the same during the entire tenure of the policy.Further, the some insurance companies forgo the future premiums (as per the policy regulations) in case of critical illnesses. 

Factors Considered for Premium Calculation

  • Gender 
  • Age
  • Number of critical illnesses covered
  • Family Medical History
  • Policy Tenure

5 Reasons you must attach a Critical Illness Rider with your Term Plan

Large Cover

The lump sum from a critical illness rider is in addition to any other health plan or medical policy you have taken. This money is something extra for your family to rely upon in the time of need. The money can be taken with minimal documentation and can be initiated anytime a critical illness occurs. It is a smart income replacement until the earning family member bounces back to health.

Added Security

The modern times have seen a huge rise in the number of patients with critical illnesses. Major organ replacements, major surgeries, heart operations, valve replacements, stents, kidney and lung failures, and accidents - there are endless scenarios. A critical illness rider is a silent and effective layer of protection at such times.

Tax Benefit

The term insurance policy premium gets tax benefits under Section 80 C of Income Tax Act, 1961. You can deduct an amount of INR 1.5 lakh towards premium payment from your taxable income. 

Better Medical Care

When you have more cash flow to rely upon, you can avail better medical treatments and procedures. You can opt for advanced medical treatments and longer recovery periods. You can hire specialised help for aftercare and take good quality diet for faster recovery. So, your chances of survival and the extent of bouncing back to health increase manifold.

Immediate Assistance

The critical illness riders are the direct cash withdrawal windows into your policy sums. All you have to do is, submit the medical reports, KYC documents, and other related papers and take ready cash. The procedure can be initiated by anyone right at the moment of diagnosis.

So, all in all, adding a critical illness rider to your term plan enhances your security cover. It braces you well for any emergency situations that might arise in future. All of these benefits come along with double tax benefits. 

So, attach a critical illness rider and make your term plans and future more secure.

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