More is never enough!
Don’t you go to the office or for your business to make money every month. You want to excel in your performance so that you make extra incentives to support your finances?
It is in the same way you buy a critical illness cover with the term insurance policy even if you have a health insurance policy.
A health insurance policy pays you the actual cost of expenses you have incurred after the hospitalisation. A mandatory 24 hours of admission to the hospital to treat the illness is a mandatory condition implied under the policy. Let us understand this with an example. Suppose, Rajat purchased a health insurance policy for a sum insured of Rs.5 lakhs. It was a family floater policy which covered his wife and daughter also. After continuing the policy for a few years, Rajat fell sick and he was admitted for his surgery. The total cost of treatment amounted to Rs.6 lakhs. Even after earning the cumulative bonus under the health insurance policy, the cost of treatment exceeded the total expense. It left the family under financial pressure. Despite the high quality treatment, Rajat passed away. He was the sole-breadwinner in the family and there was no other earning source. Their family suffered the loss of a family member as well as were under the financial stress.
Had he taken another life insurance policy like a term plan, the family would have been in a better place to battle the stress. Loss of human life cannot be replaced but that of the money can be. If Rajat had bought a term insurance plan, the family would have received a lump sum to manage the financial crunch.
Let us explore how the policy helps?
How does a Term Life Insurance plan help?
A term life insurance policy is a life cover that pays the nominee after the death of the life insured. If the policy purchased under a term plan is of Rs.1 crore, the nominee would get Rs.1 crore after the death. The condition applies if the death happened during the policy term and provided all the premiums have been paid.
Term life insurance is a beneficial policy as it saves you money not only for premium but also provides tax benefit. Term life is the only high life cover that is available at the low premium. For example, you can buy a Rs.1 crore term insurance at just Rs.542/month. The policy also covers covid-19 life claims.
Now suppose that Rajat contracted a serious stage of kidney ailment. Doctors confirmed that Rajat had very minor chances of survival. He also suggested that the surgery was important else his health will deteriorate at a rate faster than expected. The cost of treatment involved was higher than Rs.10 lakhs (total savings that Rajat had). Family had meagre savings which is why they were in deep thoughts whether they should think of the savings or Rajat’s life.
Several times,scenarios like this become a thought of concern for many. Neither all the families can afford expenses for the treatment nor they could ignore the deteriorating health of Rajat. In such cases, owning a term plan with critical illness policy becomes beneficial.
Let us see how? But before that you must understand what critical illness insurance is?
What is Critical Illness Insurance?
A critical illness insurance policy is also known as dread disease policy. The insurance policy pays the life insured lump sum payment right after the diagnosis of the disease. The amount received is free from tax and can be used either to get the treatment or to make for the loss of income.
Thinking about how it differs from health insurance?Read further to know more.
How is Critical Illness different from Health Insurance?
These are the ways in which the critical illness is different from the health insurance:
| Particulars | Health Insurance | Critical Illness Cover |
| Sum Assured | Sum Assured are opted after considering the premium. | High Sum Assured can be chosen. |
| Premium | Premiums under health insurance are higher. | Premium under Critical Illness is lesser in comparison. |
| Claim | The policy pays after the verification of the claim documents only. | The policy pays in lump sum right after the diagnosis of the illness. |
| Hospitalization | Minimum 24 hours hospitalization is required except in a few cases. | No such condition exists. |
| Policy Type | Standalone policy that covers for treatment of disease, hospitalization, post and pre hospitalization expenses. | The Critical Illness policy can be taken as a rider cover also. |
Whether or not you should take it up with the term plan is another question of concern. Let us read further.
Should I take a Critical Illness cover with Term Insurance if I have Health Insurance?
A critical illness policy pays the life insured after the diagnosis of the critical illness that include heart ailments, kidney disease, and cancer. The best part of owning the policy is that it covers all stages of diseases. The cover can be taken as the rider which means it will be an additional cover under the same policy.
Rider covers strengthen the term insurance policy by offering multiple benefits. Though the rider covers come at an additional premium, the benefit of adding them is huge. A rider cover for critical illness can protect your family from draining their savings on the treatment.
With a term plan a critical illness policy will offer great benefits.
- The critical illness policy will take care of the expenses when the life insured is alive.
- The rider cover will help in income replacement for the life insured.
- Without the critical illness cover, the life insured will have to think twice before spending so much money.
- The critical illness rider will provide coverage for all major diseases like stroke, heart attack, cancer, paralysis, coronary artery bypass surgery, major organ transplant, and kidney failure.
- It will pay you for the expensive treatment costs in India that protects the savings of the life insured.
- The critical illness with term plan protects the family financially. If the life insured passes away due to the illness, the family dependents will receive the sum assured as the death benefit. It enables the family to take care of the loan liabilities that the life insured might have taken.
Things to keep in mind before selecting Critical Illness Cover with Term Plan.
These are the things you must keep in mind before selecting the critical illness cover with the term plan:
Amount of Coverage:
Check the amount of benefit that you will get under the critical illness cover. It should be equal to the amount of sum assured that you have chosen. You should be aware of the total sum assured that is payable in case of the demise of the life insured or total permanent disability of the insured.
Understand the term and conditions under the policy:
Under the term plan with a critical illness rider, it is important you understand how and when will the claim be admissible. You should know that there is no condition of minimum survival period under the critical illness cover. The benefit will be paid based on the first diagnosis.
Know the other features offered by the term plan:
You must check for the features of the term plan that are offered. See whether the features suit your requirements or not.
Policy Term:
Check for the policy term that is permissible for which you can buy the term plan. It will be dependent on your age.
Conclusion:
No or yes, the point is that you must understand that with a critical illness insurance policy, a basic term plan gets better. You have higher security and better coverage. With the rider option, the family’s savings can be protected. Critical illness cases are on the rise with the ever increasing cost of healthcare facilities.
This is why having a term plan which is an affordable life insurance policy along with a critical illness rider is better. It saves you from the hassles of asking for money for a medical emergency. Apart from this, the family feels confident financially. There are other riders also that you can include under the term plan. Read here for more information on critical illness and other riders.
