Sudesh was an average guy living in Delhi NCR with his wife and children. He had purchased a term life insurance plan to make sure his family is covered in case of his untimely demise. He was even regular with his premium payments and taking care of his overall health with regular check-ups and exercise. Despite all of this, one day, he had a stroke while he was asleep. Although he was able to survive, as a result of the stroke he suffered from paralysis on the right side of his body. There were also some expensive treatments and tests which took a heavy toll on the finances of his family. The long leaves that he had to take also resulted in his loss of employment. This eventually drove him and his family to the brink of bankruptcy. Although he had an active life insurance policy, it did not provide any relief due to his term life insurance plan missing an important component called critical illness rider.
What is a Critical Illness Rider?
Critical illness rider or critical illness benefit rider is an added benefit that you can add to your term life insurance plan which can help you prevent the financial burden placed on you in the unfortunate event of a critical illness. If you are taking a term insurance plan such as the LIC term insurance plan, you can add the LIC critical illness rider so that in case you are ever diagnosed with a critical illness that is listed in your term insurance plan you can receive a lumpsum payment. This helps you deal with the hospitalization expense and your current term plan can continue either with full coverage or slightly reduced coverage. What makes the LIC term plan with critical illness even better is the fact that it is often offered at a reduced price on top of your term insurance premium payment.
What are the benefits of adding a critical illness rider to your term plan?
The critical illness rider provides you with the lumpsum payment in case you are diagnosed with any critical illness but there are some additional benefits to this rider as well. Here is a full list of benefits that you get while taking term life insurance with a critical illness rider.
6 Benefits of adding critical illness rider in your Term Insurance
- Pay-out on critical illness diagnosis: One of the primary benefits of adding a critical illness rider to your term insurance plan is that you are able to get a lump sum pay-out in case of your positive diagnosis. The money can help you pay off the hospitalization expense in case your health insurance falls short or in case you do not have a health insurance policy. It can also make up for your loss of pay due to leaves or loss of employment.
- Improved survival chances: Critical illnesses in India are often associated with the high cost of treatment. The lump-sum payment of the critical insurance rider can ensure that you have better means and you can afford to get yourself treated at a better place.
- Financial protection against disability: If you, unfortunately, get a disability as a result of a critical illness, you can get at least some amount of money to ease your burden. If you wish further protection against such an eventuality, you can also add a disability rider to your term insurance plan along with the term insurance critical illness rider.
- Tax Benefits: As your premium increases, you can get more tax benefits under section 80C under the Income Tax Act. The premiums that you pay towards your term life insurance plan can get you income tax deduction up to INR 150,000. This amount of deductions is doubled if you add the critical illness rider to it and you can reap double tax benefits in the same policy.
- Straightforward Claim Settlement Process: Taking a term insurance plan has become much simpler these days as there is no lengthy paperwork and the process is fairly fast. The claim settlement process has also come a long way provided the insurer has a high claim settlement ratio such as LIC.
- Protection against most illnesses: Most of the critical insurance riders provide cover for all major illnesses. These illnesses include heart attack, cancer, full or partial paralysis, kidney failure, organ transplants, stroke, etc. Several of these diseases can put a severe dent in one’s savings and that is why a critical illness cover such as critical illness rider of LIC can be of great help.