The Long Read
Everything you *need to know* is right above this. Scroll down, only if you'd still like to read more (honestly, why?)
Your family is dependent on you, for your income and caregiving.
But what happens if you get diagnosed with a critical illness like cancer, or heart disease or you need an organ transplant?
You may have to reduce your work hours to focus on your treatment, resulting in a pay cut
You may even need to quit your job resulting in a loss of income
This sudden financial crisis will put more stress on you and your family and will affect your chances of recovery.
This is where the Critical Illness Rider comes in handy.
It is an add-on benefit to your term insurance plan which gives you an advance payout from your life cover when you're diagnosed with any critical illness.
Additional tip: If you are diagnosed with a terminal illness rather than a critical illness, then a Terminal Illness Rider may be more suitable. Find out what the Terminal Illness Rider is.
You should buy a Critical Illness Rider if
Let's understand with an example:
Say you have a term plan with a life cover of ₹ 1 cr and a Critical Illness Rider of ₹ 20 lakhs.
You get ₹ 20 lakhs if you get diagnosed and your family gets ₹ 80 lakhs if you die.
This means:
The Critical Illness Rider can be expensive. Check with your insurer for the actual cost.
But remember, it is also a very useful rider. So don't take any decision just based on the cost.
Assess your needs, evaluate your current health insurance and then decide if you should opt for this or not.
Speak to your insurance advisor too for further guidance.
You can opt for a Critical Illness Rider when you are buying term insurance or you can buy it later on your policy anniversary.
You can check with your insurer for the exact procedure or an insurance advisor if you are buying through one.
That depends on the rules set by your insurer. There are certain cases where you won’t be eligible to buy the Critical Illness Rider.
For example, you may not be eligible for this rider if
You already suffer from diabetes or any heart disease or you have had cancer in the past; or
You are transgender
However, these cases may differ from insurer to insurer.
So the best thing you can do is speak to your insurer or an agent/broker to understand if you will get this rider.
The Critical Illness Rider may not cover you for the entire policy duration, especially if your policy covers you till old age.
It’s best to check with your insurer to know till what age you can get covered by this rider on your term plan.
Yes. You can buy it on the day of your policy anniversary subject to you meeting the insurer's eligibility criteria.
It varies from insurer to insurer. Depending on the insurer and the plan you choose, the Critical Illness Rider can be an Additional Rider (giving you an additional amount over and above your life cover) or an Accelerated Rider (giving you a part of your life cover early).
Some of the exclusions in this rider are:
Pre-existing disease
Congenital Infection
Participation in war, riots or rebellion activities
Attempt to suicide or self-inflected injuries
Participation in criminal activities
Participation in dangerous activities
Speak to your insurer to check the complete list of rider exemptions as the final list will vary from insurer to insurer.
Yes, you can get tax benefits* up to ₹ 1.5 Lakh for the policy premium paid, under Sections 80C and 80D of the Income Tax Act.
*Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions and tax Laws are subject to change from time to time. You are requested to seek tax advice from Chartered Accountant or personal tax advisor with respect to personal tax liabilities under the Income-Tax law
© 2021 KlarifyLife. All rights reserved.
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