5 Benefits of Critical Illness Rider in Term Insurance
Life insurance is one of the best financial tools that can secure the financial future of your dear ones. The hectic corporate work culture, unhealthy eating habits, addiction to smoking and alcohol are some of the reasons which can cause severe and life-threatening health problems.
Getting a health checkup periodically can help you to prevent or reduce the extent of damage to the body. Besides this, it can alarm you about the onset of any critical illness so that you can take preventive measures. The cost of medication is significantly high and can take a toll on your pocket. Moreover, it can jeopardize your family’s monetary well-being, as your savings can go down the drain. Therefore, it becomes vital to invest in a term insurance plan with a critical illness rider. Many insurers offer such plans, and it may be difficult to search for the right policy that can meet your requirements and financial objectives. You can seek the help of a term insurance calculator to make this daunting task easy. Although you have to pay an extra amount over and above your basic term plan premium, it is worth it, as it widens the policy’s coverage.
What is a critical illness rider?
A critical illness rider under a term plan ensures that the policyholder receives a lump sum when diagnosed with any serious illness pre-defined by the insurer. The amount received on the diagnosis of a critical ailment can come in handy for the insured to pay for the cost of hospitalization and medicines.
Advantages of a term plan with a critical illness rider
- Helps in replacing your income
When you have a health insurance plan from your employer or an individual mediclaim policy, its offering is restricted to your medical treatment. Conversely, you can use the money that you receive under a term insurance plan with a critical illness rider for paying pre- and post-hospitalization costs, purchasing medicines, and taking care of other expenses, such as household expenditures and doctor’s consultations, among others. Therefore, a critical illness rider acts as an income replacement tool.
- Covers many critical diseases and even disabilities
Critical illness rider covers approximately 36 diseases and disabilities. Some of these include Alzheimer’s disease, angioplasty, brain surgery, cancer, deafness, loss of limb, loss of speech, heart surgery, and total blindness. In India, around 60% of the deaths occur due to critical illnesses, and this figure is expected to rise soon. Therefore, it becomes essential to invest in a term insurance plan with a critical illness rider. You can save a significant sum on the cost of medication and hospitalization by making this wise decision.
- Offers double tax benefits
You can avail of tax exemptions and save a large amount over the years. The premium that you pay towards your term plan is tax-exempt under Section 80C of the Income Tax Act, 1961. Here, you can claim a maximum deduction of INR 1.5 lakh per annum. Additionally, the premium paid towards the critical rider is tax-exempt up to INR 25,000 per annum.
- Provides a high coverage at a pocket-friendly premium
Term insurance in India is popular because it offers a huge sum assured at a nominal premium. Besides this, the premium remains constant throughout the plan’s tenure. On the other hand, the premium of a regular health insurance plan increases with age. It can prove to be costly when you grow old. So, it is better to opt for a critical illness rider under a term plan.
- Reduces the chance of mortality
The costs of medications and hospitalization are expensive in India, and due to a shortage of funds, many people cannot afford the required treatments. However, with a critical illness rider, you can increase your possibility of survival.
You may have understood what is term insurance plan and how a critical illness rider in it can be beneficial. So, without any delay, invest in a term policy and opt for a critical illness rider. You can utilize the term insurance calculator to compare different policies and invest in a suitable one.