Why Should I Buy A Critical Illness Rider?

The Critical Illness Rider is a common term insurance rider that can help an individual and their family maintain financial security during difficult times. A critical illness rider is an optional coverage that can be added to a policy in return for a higher premium. If the life assured is diagnosed with a listed critical illness during the policy's term, the critical illness rider pays a lump sum to the life assured's family. Critical illness riders cover serious life-threatening disorders like cancer, tumors, heart problems, kidney failure, and so on.

Critical Illness Rider

A Critical Illness Rider is a useful rider that provides financial assistance to the policyholder if they are diagnosed with a serious illness while the policy is in effect. Cancer, stroke, kidney failure, and other life-threatening illnesses are examples of critical illness. A critical illness rider can help you get better coverage for cancers of a certain severity, open chest CABG, first heart attack, renal failure, stroke, and other severe illnesses covered by your plan. When a policyholder or their family is diagnosed with a critical illness, the rider provides a lump sum payment to safeguard the policyholder and their family financially. The money collected might be used to pay for the treatment of the condition that has been diagnosed.

The Critical Illness Rider helps the life guaranteed get their medical expenditures resolved without worrying about financial stability or reducing treatment quality due to a lack of finances by providing additional coverage at a minimum additional cost. The critical illness rider can be purchased at any time after the base policy's inception or on any consecutive policy anniversary. The rider ends when the rider sum assured is paid or when the policy term of the rider expires, whichever comes first. According to the Income Tax Act of 1961, the rider provides tax benefits.

Benefits Of Critical Illness Rider

1. Income Replacement 

Being diagnosed with a severe disease at any point in your life can be stressful in a variety of ways, one of which is the loss of income. It is possible that you will have to leave your employment to focus on your treatment. If you do not have a critical sickness benefit rider at your side to fund the treatment expenses, this can result in a significant loss of money. On the other hand, if you combine a critical illness rider with a term insurance plan, you would not have to worry about your financial future or that of your family. You will receive a substantial sum to compensate for your lost income, and you will be able to live a happy life free of financial worries.

2. No Change in Premium

Adding a critical illness rider to your term insurance policy will almost certainly increase your rate. However, if you are diagnosed with one of the covered serious conditions, your premium will not increase. In other words, even if you are diagnosed one day, your policy premium will not change. Furthermore, the insurance company will waive your future rates, saving you the trouble of obtaining finances, even if you are in a crisis situation.

3. Large Cover

In India, the cost of treatment for serious illnesses such as cancer, heart attack, kidney failure, and others is relatively high. Treatment costs can quickly deplete a person's financial resources. The critical illness rider is a godsend in this case, as it provides comprehensive coverage against a variety of serious illnesses for a small additional premium. To put it another way, you get more for less.

4. Lump Sum Benefit

Illness that is life-threatening By paying a lump sum amount, the rider assists the policyholder in managing their medical expenses. In other words, the policyholder receives the entire amount at once, which is a huge comfort because the policyholder can pay for the treatment costs without worrying about running out of money. Furthermore, customers can customize the amount to meet their own needs.

5. Increased Survival Chances

Many people in India are unable to afford critical disease treatment due to the skyrocketing expense of care. Many people are forced to stop their therapy in the midst owing to a lack of cash. A critical illness rider added to your term insurance policy will ensure that you are never forced to forego treatment due to a lack of cash. Because good treatment reduces the chances of mortality, the policyholder's chance of survival increases despite the critical sickness.

6. Double Tax Benefits

Term insurance policyholders are entitled for tax benefits under Section 80C of the Income Tax Act of 1961. The policyholder can claim a tax advantage of up to Rs. 1.5 lakh for the policy premium paid under this section of the tax legislation. When a policyholder purchases a critical illness rider in addition to their regular term insurance, their tax advantages are quadrupled. Choosing critical illness insurance in addition to term insurance expands the pool of tax benefits available under Section 80D, increasing their value.

Take Away

As can be seen, most stand-alone critical illness plans have short term contracts with little alternatives for renewal. Buying critical illness riders with your life insurance plan, on the other hand, can assure a longer period of coverage. If the consumer buys a critical illness benefit together with a term plan, he will be able to get far more coverage for a much lower price.

Also Read: Why Is It Necessary To Include A Child Support Benefit Rider In Your Term Plan?

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.