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Significance of Critical Illness Benefit Rider In Life Insurance

Updated On Aug 20, 2021

Term insurance contracts are intended to provide financial compensation to your beneficiaries in the event of your death; however, the coverage can be expanded by adding riders. Riders are add-ons or extensions to a life insurance policy that provide additional coverage under specified conditions. One of the most common types of riders is the Critical Illness Benefit Rider. When this rider is added to a term insurance policy, it enhances coverage for the insured if he or she is diagnosed with a severe illness while the policy is still in effect.

What Are Critical Illness Riders?

A critical illness rider safeguards the insured in the case of a critical illness diagnosis. Its purpose is to pay for any medical expenses incurred as a result of the serious disease. Benefits are paid out in a lump sum regardless of actual expenditures spent. This type of rider only pays out once during the insurance term, and the maximum benefit offered varies by company.

The insurance company's list of critical illnesses that are covered by the rider and can be added to a term insurance policy differs. However, there are also some prevalent health issues that are typically covered by most term insurance policies if a critical illness rider is added.

Also read - Significance Of Riders In Life Insurance 

Illness That Are Covered Under Critical Illness Rider And The Benefits Provided

The following are common health conditions and illnesses that can be covered by a term insurance policy with a critical illness rider, as well as the benefits provided by the rider:

1. Diabetes: Diabetes seems to have become a common lifestyle disease in subsequent years as a result of our changing diets and decreased physical activity. When a diabetic is diagnosed, a critical illness rider attached to a term plan can help control the costs of drugs and doctor appointments.

2. Heart Conditions: Busy schedules and strenuous lives are two factors contributing to a spike in the volume of people suffering from various cardiac illnesses. These include high cholesterol and cardiovascular disease, both of which can result in a heart attack in extreme cases. A critical illness rider on a term policy can help pay for medicines, surgery, and cardiac rehabilitation.

3. Kidney-Related Diseases: Kidney disorders are quite common among the elderly. Critical illness riders on term insurance plans can cover the costs of treating kidney-related conditions such as renal failure.

4. Lung Diseases: Bad habits, such as smoking or vaping, can harm your oesophagus, specifically your lungs. As pollution levels grow, however, even nonsmokers are at risk of developing diseases such as asthma and chronic obstructive pulmonary disease. A critical illness rider can be added to a term plan to cover the costs of treatment and medications for such lung problems.

5. Cancer: A term insurance policy with a medical rider, such as a critical illness benefit, can assist you in managing the costs of treatment for a catastrophic illness such as cancer. Although it is restricted to a specific stage of cancer, it can help pay for medicine, procedures, diagnostics, and other types of treatment.

Take Away

A life insurance policy, in its most basic form, can provide financial protection for your life and the lives of your loved ones. Term insurance with a critical illness rider, on the other hand, can provide coverage that goes far beyond financial stability. The addition of a critical illness rider lowers the policy's cost compared to standard insurance plans while also ensuring that you are not financially ruined if you get any of the prevalent health conditions outlined above.

If you have a critical disease, it is strongly advised that you obtain this type of rider. This is owing to the fact that severe illnesses typically incur hefty prices, which may be costly for you or your family members if you die prematurely. The advantages of a critical illness rider will greatly aid you in covering such expenses.

You may also like to read - Frequently Asked Questions About Life Insurance Riders

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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