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Term Insurance With Critical Illness Rider - Let's Know the Condition

Published On Aug 24, 2021

In most cases, health problems occur without warning, putting a financial strain on the family. In such circumstances, your family will be concerned about the cost of your treatment as well as the loss of income because of your illness. So, in order to cover these costs, most families dig into their savings account, which is usually set aside for their children's education or their own retirement. Term insurance plans with critical illness riders address specific life-threatening illnesses that necessitate expensive and advanced medical treatment. It's a good idea to have critical illness insurance as such treatments can be quite costly. 

What Is A Term Insurance Plan With A Critical Illness Rider?

If you are diagnosed with one of the conditions listed in the insurance policy's specified list, you will get a lump sum payment under a term plan with critical illness benefits. Cancer of specified severity,  open heart replacement or repair of heart valves, major surgery of the aorta, open-chest CABG, end-stage liver disease, end-stage lung disease, benign brain tumour, loss of limbs, major head trauma, third-degree burns, and permanent paralysis of the limbs, besides many others, fall into this category. 

What are the Features and Benefits of a Term Insurance Plan With A Critical Illness Rider?

Here are some features of a term insurance plan with a critical illness rider. 

  • Covers Specific Illnesses Only 

A critical illness insurance coverage protects you from a variety of conditions. The plan benefits list the ailments that are covered under the plan's coverage. Only if you are diagnosed with one of the covered conditions may you file a claim. If, on the other hand, you have a sickness that isn't covered by the policy, you won't be able to file a claim.

  • Provides Financial Support 

Significant medical expenditures will financially burden you if you do not have insurance. Individuals with serious illnesses frequently do not receive treatment owing to a lack of funding. The likelihood of mortality increases if appropriate care is not provided. However, if you have a critical benefit plan in place, you may be able to get cash on time to receive the treatment you require, raising your chances of survival.

  • Specific Terms And Conditions 

Claim payouts under critical illness insurance plans are subject to certain limitations and conditions. They deal with ailments of a certain type and intensity. Critical illness rider, for example, normally covers the first heart attack. So, if you have a heart attack after purchasing coverage, but it is not your first heart attack, no claim will be paid. Moreover, cancer of a certain severity is covered under the rider. So, unless your disease meets the plan's description, you won't be able to file a claim.

  • Survival Period 

Term insurance plans with critical illness riders have a fixed survival period. This time normally lasts between 30 and 90 days. After the duration is completed, the claim is paid. 

  • Affordable Premiums 

The premium for term insurance with critical illness benefit remains the same throughout the policy's term. This means that once you've been diagnosed with a serious disease, your premium won't go up. Furthermore, when a critical illness is diagnosed, insurance companies forgo any future premiums.

  • Tax Benefits 

Section 80C of the Income Tax Act of 1961 allows premiums paid toward a term plan to be tax-deductible. As a result, you can deduct up to Rs 1.5 Lakh in premium payments from your taxable income. Furthermore, under Section 10 (10D) of the Income Tax Act, the benefits earned from this plan are tax-free. Moreover, tax benefits are also provided under Section 80D because of the term insurance plan with a critical illness rider.

Take Away

Adding a critical illness rider to your online term insurance policy provides additional security and safeguards your future in the event of a serious illness. Hence, you should purchase a critical illness rider to protect your money from being depleted by costly treatment.

Also Read: 

Steps To Buy Retirement Insurance Plans Online

Should You Buy Term Insurance With Mutual Fund Or ULIP?

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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