Critical illness rider provides financial assistance to the policyholder if they are diagnosed with life-threatening illnesses. It is a vital protection for all health and life insurance policyholders as it offers monetary compensation for treating such diseases. This article discusses what critical illness rider is, what are its benefits, and why everyone must buy it.
Most of us know that Life insurance is critical to provide financial protection to our family against future uncertainties. In the event of your unfortunate demise during the policy tenure, the insurance company will pay the sum assured (‘death benefit’) to your family. Your family can use this amount to maintain their regular lifestyle and pay off the debts that they may have. Thus, Life insurance guarantees the financial independence of your family even in your absence.
However, like any other insurance, a standard life insurance policy does not offer comprehensive coverage; it has certain limitations. For example, a standard life insurance plan does not cover critical illness or disabilities. This is where riders play a crucial role.
Generally, the insurance companies in India offer a variety of riders that allow you to cover specific risks that are not covered under the regular policy. Continuing with the above example, a critical illness rider will enable you to get coverage against life-threatening diseases like cancer, liver damage, heart ailments, etc.
What is a Critical Illness Rider?
A critical illness can cause a substantial financial burden as the treatment cost for such diseases can run into several lakhs. Such conditions can deplete your years of hard-earned savings before you realise it and derail your entire financial planning.
To avoid such a situation, it is better to have a critical illness rider if your family has a history of critical illness. With this add-on at your disposal, you can be assured to get financial assistance from the insurance company immediately upon diagnosis of the disease. However, make sure that the condition you have is covered under your plan before raising a claim. You can use this amount to meet your treatment expenses and for other purposes as you deem fit.
Common illnesses covered under a critical illness rider include heart diseases, organ transplant, open chest CABG, loss of speech, deafness, cancer, etc.
Benefits of Critical Illness Rider
- It Can Replace Your Income
One of the significant benefits of this rider is that it can help in replacing income. Due to critical illness, a person might lose their stable source of income. However, the amount received from this rider can be used as an alternative source of income. Thus, the policyholder can pay their household expenses, loans, etc.
- Protection Against Various Critical Illnesses
Various critical illnesses can cause a substantial financial burden on the policyholder. Some of them are heart attack, paralysis, stroke, cancer, etc. The medical expenses of treating such illnesses can be very high. However, with the help of the lump sum amount, a policyholder can pay for the treatment.
By purchasing this rider, a policyholder can get extra coverage without buying a separate policy. Hence, it becomes affordable for policyholders as they don’t have to pay for a new plan. Therefore, while this plan is inexpensive, it can provide financial protection to the policyholder.