Everything You Need To Know About Critical Illness Rider

Here is a bitter pill to swallow – a tragedy can strike at any point. You might think you are leading a healthy life and will continue to do so. However, a critical illness can swoop in at any time, leaving you in physical, emotional, and financial distress. 

In 2019 alone, India recorded a staggering 9.3 lakh deaths due to the fatal disease- cancer. These numbers will only grow given the unhealthy lifestyles and increased pollution levels today. 

Getting diagnosed with such critical diseases not only causes mental strain on your family but will also bring immense financial burden. In such cases, a standard life insurance policy will not be of much help. You will need the extra assistance of a critical illness rider.  

What Is A Critical Illness Rider ?

A critical illness rider is an extension to your term life insurance policy. It is an add-on that covers serious health issues like heart attacks, kidney failures, stroke, and cancer. Usually, when diagnosed with such critical illnesses, the high medical bills can take a toll on your financial health. 

Since standard life insurance policies only pay the sum assured in case of death, the extra burden of medical bill payments and rehabilitation therapy can create a big dent in your finances. However, with a critical illness cover, you receive an immediate payout that takes care of your medical bills and provides extra funds to compensate for the missed income. 

Why Should You Have A Critical Illness Cover ?

If you’re still not sure whether a critical illness rider is worth it, let us share with you the story of two individuals : Bharat and Ravi. 

Both of them purchased a life insurance policy at a young age. However, Bharat purchased term insurance with a critical illness rider, while Ravi decided the extra expense was not worth it. Unfortunately for them, Bharat suffered a stroke while Ravi was diagnosed with cancer.

With the critical illness rider, Bharat received an immediate payout. This financial aid covered medical expenses, daily living, and other financial needs during his treatment.   

On the other hand, Ravi struggled to manage his finances with the high treatment costs. Due to the lack of critical illness coverage, he had to pay for the hefty medical bills and other expenses out of his own pocket. As a result, his family was burdened with arranging for funds on top of taking care of him. Had Ravi opted for a critical illness rider, he and his family would have been able to focus on his recovery instead of the piling medical bills.

Benefits Of Critical Illness Rider

Critical illness add-on comes with the following key benefits: 

1. Financial Security During Medical Emergencies: The add-on offers immediate payment if you are diagnosed with a severe illness. This financial aid can protect your family’s financial security during a medical emergency. 

2. Protection from Numerous Life-threatening Illnesses: The rider covers a broad spectrum of critical illnesses, like cancer, stroke, kidney failure, etc.  

3. Tax Benefits: Under section 80D of the Income Tax Act, you can claim a tax deduction of up to  ₹25,000 on the premium payments made for term insurance with a critical illness add-on.

4. Accident or Disability Coverage: Beyond illnesses, some critical illness add-ons may also provide financial aid in case of accidents or permanent disabilities. 

5. Income Replacement: In the event of job loss due to critical illness, the monetary support provided by your insurer can be helpful and act as a replacement for your income. This will ensure that you or your family do not suffer the financial stress of paying rent, children’s fees, and other recurring expenses.

Things To Be Mindful Of When Purchasing A Critical Illness Add-on

Adding a critical illness rider is undoubtedly a smart choice. However, you need to be mindful of the following aspects before selecting the rider for your term plan:

1. Exclusions: The benefits of a critical illness cover cannot be availed in all situations. There are some exclusions which vary depending on the insurance company. Make sure you are aware of all exceptions to avoid any surprises later. 

2. Diseases Covered: Carefully review the list of diseases qualifying for critical illness cover. Match your past health records with the disease list to ensure you are completely secure. 

3. Premium Cost: Term life insurance with critical illness riders can come at a higher premium cost. Make sure the cost of premiums aligns with your budget. 

4. Sum Insured: There is a limit to the amount that you can avail of from the rider. Make sure you select a sum insured that is adequate according to your medical needs. 

Diseases Covered Under A Term Plan With Critical Illness Benefit

1. Cancer (specified severity)
2. Angioplasty
3. Heart valve surgery
4. Surgery to aorta heart and arteries
5. Myocardial infarction
6. Primary (Idiopathic) pulmonary hypertension
7. Open chest CABG
8. Cardiomyopathy
9. End stage lung failure
10. Kidney failure requiring regular dialysis
11. Blindness
12. Apallic syndrome
13. Benign brain tumour
14. Loss of speech
15. Brain surgery
16. Coma (specified severity)
17. Major organ or bone marrow transplant
18. Medullary cystic disease
19. Permanent paralysis of limbs
20. Alzheimer
21. Stroke resulting in permanent symptoms brain and nervous System
22. Aplastic anaemia
23. Multiple sclerosis with persisting symptoms
24. Muscular dystrophy
25. Motor neurone disease with permanent symptoms
26. Poliomyelitis
27. Parkinson’s Disease
28. Loss of Limbs
29. Deafness
30. Systemic Lupus Erythematosus (SLE) with Renal Involvement
31. Third degree Burns
32. Others

This list is not exhaustive. We recommend going through the insurer’s policy documents to understand full coverages under critical illness. 

Key Takeaways

We are living in an era where incidents of fatal illnesses are on the rise. Unhealthy lifestyles and lethal pollution levels make the daily atmosphere a breeding ground for health issues. Hence, it is high time we understand that critical illness coverage is not an added expense but necessary to keep you and your family financially secure. Leverage the convenience of platforms like PhonePe to secure and manage your critical illness coverage with ease.