Terminal Illness Rider
Accelerated terminal illness rider is additional coverage that can be purchased along the insurance policy. Accidental Terminal Illness riders can help an individual in difficult times. In case the life assured is diagnosed with a terminal illness 100% of the rider sum assured shall be provided.
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What is Terminal Illness Rider Cover?
Accelerated Terminal Illness Rider provides financial security to the policyholder in case of emergency such as diagnosis of a terminal illness. Terminal illness is a non-correctable illness under which a person’s life expectancy is less than 6-12 months. This rider provides immediate financial assistance in case the life assured is diagnosed with a terminal illness during the coverage period.
This rider can be added to base policy at the time of policy issuance or renewal. Under Accelerated terminal illness rider, 100% of the rider sum assured is provided to the family of the life assured in case the life assured is diagnosed with a terminal illness during the coverage period. Although the life assured receives a rider payout, they are covered under the base policy. Once the rider benefit amount is paid to the life assured on diagnosis of terminal illness the life assured shall not be covered under this rider henceforth.
It must be noted that the life assured must notify the insurance provider about the diagnosed terminal illness within three months of diagnosis being made. Under this rider one can also avail tax exemptions.
Importance of Accelerated Terminal Illness Rider
Accelerated terminal illness is an effective rider to purchase along your insurance policy. In difficult times this rider can provide financial assistance. Medical treatment costs have increased in India since the last few years. Medical expenses associated towards hospitalisation or treatment of a terminal illness can be a burden on an individual. Under such circumstances an accelerated terminal illness rider can be beneficial. Here are some reasons that justify why accelerated terminal illness rider can be essential:
- Financial Assistance: Accelerated Terminal Illness Rider provides an individual financial security in times of dire times. Being diagnosed with a terminal illness at any point of time can be a matter of concern in several ways such as loss of income and treatment expenses for the terminal illness. This can result in loss of savings in case you do not have an accelerated terminal illness rider along your insurance policy which can help you cope up with the treatment expenses. If you have an Accelerated Terminal Illness rider along your insurance policy you can ensure your family’s financial security in case you are diagnosed with a terminal illness. Under this rider 100% of the rider sum assured shall be provided to the life assured in case the life assured is diagnosed with a terminal illness during the policy tenure.
- No Change in Premium: Accelerated Terminal Illness rider is an additional coverage which can be added to the policy at the time of policy issuance or renewal in exchange of additional premium. Purchasing an accelerated terminal illness with your term insurance policy would definitely add to your premium but this will not change your premium in case you are diagnosed with any of the terminal illness. In simple words, the premium for your policy will not increase in case you are diagnosed with a terminal illness.
- Extended Coverage: The treatment cost of terminal illness such as Liver Diseases, Pulmonary Diseases, dementia, HIV, Cancer, Stroke or Coma is quite expensive in India. The treatment expenses for such illnesses can put a financial burden on an individual in no time. Under such cases Accelerated Terminal Illness riders can benefit an individual by providing extended coverage. Treatment expenses for terminal illnesses are initially not included in term plans but after adding this rider to your insurance policy you can avail the benefit of extended coverage.
- Lump Sum Benefit: Under the accelerated terminal illness rider, lump sum benefit is provided to the nominee in case the life assured is diagnosed with a terminal illness during the coverage period. A lump sum benefit is provided as soon as the life assured intimates the insurance provider about the diagnosed illness. The lump sum benefit amount will help the life assured to fulfill his/her treatment expenses for the terminal illness. This rider helps in reducing the burden that may fall onto the family of life assured in case he/she is diagnosed with a terminal illness during the coverage period.
- Increased Tax Benefits: A person who has a term insurance is eligible for tax exemptions under Section 80C and 10(10D) of the Income Tax Act, 1961. Section 80C of the Income Tax Act helps the policyholder to avail tax benefits of upto Rs. 1.5 Lakh for the premiums paid towards the term policy. When a person purchases an accelerated terminal illness rider along with the term insurance policy they can avail double tax benefits. Opting for an accelerated terminal illness rider along with the term insurance policy can help you avail tax benefits under Section 80D of the Income Tax Act, 1961 which results in increased tax benefits.
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Eligibility Criteria of Accelerated Terminal Rider
Below mentioned is the eligibility criteria for purchasing an accelerated terminal illness rider:
Eligibility Criteria for Accidental Death Benefit Rider
Minimum Entry Age
Maximum Entry Age
Maximum Maturity Age
Minimum - Equal to base policy’s sum assured
Maximum - No Limit (depending on the term insurance plan)
Premium Payment Term
Same as policy term
Premium Paying Mode
Same as policy mode
Coverage Time Period
Equal to the policy term
Documents Required for Accelerated Terminal Illness Rider Claim
Following is the list of documents required while filing a claim for the Accelerated Terminal Illness Rider:
- Original Insurance Policy Documents
- Filled and Signed Claim Form
- Photo ID Proof of the Policyholder
- Address Proof of the Policyholder
- Medical Reports (stating the diagnosed terminal illness)
- Attending Doctor’s/Physician’s Medical Reports and Certificates
- Bank Account Details such Cancelled Cheque/Copy of the Pass Book
Accelerated Terminal Illness Rider Exclusions
Following are conditions which shall not be covered under this rider and claim shall not be provided if any of the mentioned conditions occur:
- Intentional Self Inflicted Injuries or Attempted Suicide
- Participation in criminal, unlawful or dangerous activities
- Unreasonable failure to follow or seek medical attention
- Pre-existing medical condition
- Congenital infection
Term Insurance Companies
- ICICI Prudential
- Aditya Birla
- PNB MetLife
- Bharti AXA
- Edelweiss Tokio
- Bajaj Allianz
- Canara HSBC OBC
- Tata AIA
- Future Generali
- Reliance Nippon
- Star Union Dai-ichi
- Ageas Federal
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