Critical illness is a medical condition that could be life-threatening. It can result from unexpected causes, such as heart failure, stroke, etc.
A critical illness add-on is a form of coverage offered by many healthcare plans. As it provides a sum assured if the policyholder gets diagnosed with a critical illness during the policy term, this add-on can help cover the costs of hospitalization and nursing services during a critical illness. It can also help pay for the medications and other expenses related to the illness. Furthermore, the sum assured can be used as income replacement.
This add-on is an important part of most term insurance plans since it can help pay for necessary medical expenses incurred due to a critical illness. Let’s understand the benefits of purchasing a critical illness rider.
It Can Provide a Lump Sum Amount
If a policyholder is diagnosed with a critical illness, then the insurer can pay him/her a lump sum amount. This lump sum amount can be beneficial as it helps in covering the medical expenses incurred due to the treatment. Furthermore, it can help policyholders get funds to replace their income.
It Can Help in Replacing Income
A critical illness rider can help in replacing your income if you are unable to work due to an illness.
If the policyholder is diagnosed with a critical illness, then the insurer can pay an amount that can help in replacing income and paying medical expenses. However, the policyholder must meet the definition of critical illness determined by the insurer to avail the benefit.
It Can Help in Paying Medical Expenses
A critical illness requires inpatient hospitalization and may need extended care or therapy. These treatments can be very costly. Therefore, it is important to have a critical illness rider in place if you are diagnosed with a critical illness.
Thus, by purchasing a critical illness rider, a policyholder can safeguard his/her financial future. As the rider helps in covering the medical costs, it can ensure the financial safety of the insured person.
It Can Provide Tax Benefits
By purchasing a term insurance plan, policyholders can avail a tax deduction of up to Rs. 1.5 Lakh under Section 80C. However, by adding a critical illness rider to the policy, policyholders can get additional tax benefit under Section 80D. Thus, this add-on can help policyholder increase their tax benefits.
The medical costs arising due to a critical illness can be expensive. Furthermore, it might lead to a loss of income for the policyholder. Hence, it is crucial to get financial protection against the expenses arising due to critical illnesses. However, a critical illness rider can provide a lump sum benefit to the policyholders that can help them pay the medical expenses and replace their income. Thus, it’s important to buy a critical illness rider with term insurance.