How to Enhance Your Term Plan with a Critical Illness Rider?

How to Enhance Your Term Plan with a Critical Illness Rider?

The most modest and basic type of life insurance is the term insurance plan. It guarantees the payout of a sum assured in the policyholder's demise within the policy tenure. If the insured survives till the end of the policy term, his coverage will end, and he will get no payment. Besides, we all are aware that unforeseen things occur every day and a serious illness might strike at any time in your life. It is tough to cover the expensive medical costs during certain instances. Furthermore, if you are the family's sole earner and if you are not in a situation to work due to your illness, results in a financial crunch. Therefore, it is recommended that you purchase critical illness riders in a term plan to protect yourself against such catastrophes.

If you are diagnosed with one of the conditions listed in the insurance policy's pre-agreed list, you will get a lump sum payment under a term plan with critical illness benefit rider. Conditions such as heart failure, cancer, paralysis, heart attack, and lung illnesses fall under critical illness benefit riders list. Although critical illness rider life insurance is accessible as an independent policy, it is most commonly purchased as critical illness riders in a term plan.

What are Riders?

Riders are optional features that let you tailor your insurance to your specific needs. They are less expensive than life insurance coverage. They provide coverage in addition to what your insurance policy provides. The fee is usually between 5% and 10% of the base policy. Riders should ideally be purchased at the start of the coverage. The sooner they are booked, the less expensive they will be. The amount paid for a rider cannot exceed 30% of the premium paid for the base insurance policy.

Many people choose it because of the significant advantages of a term insurance plan with critical illness riders. Here are few of reason that will help you to enhance your plan by providing you with benefits of riders in insurance.

1. Tax benefits

Section 80C of the Income Tax Act of 1961 allows premiums paid toward a term plan to be tax-deductible. As a result, you can deduct up to INR 1.5 lakh in premium payments from your taxable income. Furthermore, the benefits obtained from this plan are tax-free under Section 10 (10D) and Section 80C of the Income Tax Act.

2. Premium remains same throughout the Policy Tenure

The premium for term insurance with critical illness benefit remains the same during the policy term once you've applied. This means that once you've been diagnosed with a serious disease, your premium won't go up.

3. Coverage of medical expenses

Healthcare costs in India are increasing by the day. Given the ever-increasing cost of medical expenses, it only becomes necessary that you are adequately covered through an insurance plan to avoid burning a hole in your pocket. Opting for a critical illness rider with your insurance policy helps you cover large parts of the medical expenses. Besides, the lump sum amount provided by the insurer may be used to cover daily expenses as well.

4. Increased chances of survival

Significant medical expenditures will financially strain you if you do not have insurance. Individuals with serious illnesses frequently do not receive treatment owing to a lack of funding. The odds of mortality increase if appropriate therapy is not provided. However, if you have a critical illness rider benefit plan in place, you may be able to get cash on time to receive the treatment you require, enhancing your survival chances.

The real benefit of life-long protection plans is that all future premiums are cancelled upon diagnosing any serious condition. Cancer of specified severity, major aorta surgery, open heart replacement or repair of heart valves, open-chest CABG, end-stage liver disease, end-stage lung disease, loss of limbs, major head trauma, benign brain tumour, third-degree burns, and permanent paralysis of the limbs are just a few of the critical illness riders covered under these options.

As a result, you might want to consider a critical illness rider life insurance, which will protect you at the time of a critical illness. Adding a critical illness rider to your online term insurance policy provides additional security and safeguards your future in the occurrence of a serious illness.


*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.

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