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  • Best Term Insurance Plans that Covers Critical Illness

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
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    Term Insurance Plans that offer Critical Illness Riders

    Term insurance is a type of life insurance product that offers a pure risk cover to the policyholder. Thus, these policies offer a death benefit payout upon the policyholder’s death. Term insurance policies usually offer policyholders a large sum assured without charging a hefty premium for the same. However, policyholders are not eligible to receive maturity or survival benefits since term insurance plans do not acquire a cash value at any time during the policy term.

    That being said, policy buyers can choose to purchase additional riders along with their term insurance policy to avail enhanced coverage. In this article, we will look at the benefits of critical illness riders and certain term insurance plans with which you can purchase a critical illness rider.

    What is a Critical Illness Rider?

    A critical illness rider is an add-on that you, as a policy buyer, can purchase along with your base policy, if it is offered by your insurance provider. This rider provides you coverage for a number of critical illnesses. In case you are diagnosed with a critical illness that is specified in the insurer’s policy brochure, the insurer will provide you a lump sum payout. In most cases, once the rider benefit is paid out, the rider will terminate while your term insurance cover will continue to be active. Certain term insurance plans also offer an optional critical illness benefit, without the policy buyer having to purchase a separate rider for the same. Some of the major illnesses that are covered by critical illness riders include:

    • Angioplasty
    • Benign Brain Tumor
    • Coronary Artery Bypass Graft (CABG)
    • Cancer
    • Chronic Lung Disease
    • Liver Disease
    • Loss of Limbs
    • Major Burns
    • First Heart Attack
    • Stroke

    *Note: This is not an exhaustive list. The exact number of illnesses covered will vary from rider to rider.

    Why should you purchase a Critical Illness Rider with your Term Insurance Plan

    Rising medical expenses are a concern for everyone. Added to that, our lifestyle choices have made us more prone to being diagnosed with a critical illness or disease. Thus, to ensure that you have the financial means to pay for such an eventuality, if it does occur, it is advisable to purchase a critical illness rider along with your term insurance plan. Some of the benefits of critical illness riders are mentioned below:

    • Income replacement: It is likely that you might have to take an extended leave of absence if you are diagnosed with a critical illness. In such a case, the lump sum benefit that is offered by a critical illness rider can act as an income replacement for your family.
    • Coverage for hospitalisation expenses: You can also use the payout provided by a critical illness rider to pay for your medical/hospitalisation expenses. This will ensure that you can focus on your recovery without going through financial hassles.
    • Premium remains constant: Once you purchase a critical illness rider, the additional premium that you will have to pay for the rider remains constant for the duration of the rider tenure, unless otherwise mentioned. Thus, the insurer will not increase the premium rate at any time during the policy tenure.
    • No medical screening: In most cases, you will not be required to undergo an additional medical screening to purchase a critical illness rider.
    • Tax Benefits: You can claim tax benefits for the premiums that you pay towards your rider and the payouts that you might receive through it. However, this is subject to the maximum tax limit under concerned sections of the Income Tax Act.

    Term Insurance Policies that cover Critical Illnesses

    Listed below are certain term insurance policies with which you can purchase a critical illness rider.

    1. Aviva i-Term Smart Plan: The Aviva i-Term Smart  Plan is a protection-oriented policy with which policyholders can choose to purchase the Aviva Critical Illness & Disability Rider – Non Linked Rider. The rider offers coverage for up to 16 critical illnesses and disability. The payout will be provided upon the first diagnosis of the disease, without the policyholder having to submit hospitalisation bills. Since this is a standalone rider, the base sum assured remains as is even after the rider sum assured is paid. Policy buyers will have to purchase this rider along with the base policy.  

    2. Aegon Life iTerm Plan: The iTerm Plan from Aegon Life offers a comprehensive risk cover against death to the policyholder. In addition, policy buyers can also choose to purchase critical illness and disability riders by paying an additional premium. The critical illness rider offered by Aegon Life covers cancer, open chest CABG, first heart attack, and stroke. Policy buyers can opt for a rider sum assured between Rs.10 lakh and Rs.20 lakh.

    3. Bharti AXA Life Flexi Term Plan: The Flexi Term Plan from Bharti AXA offers a comprehensive life cover to the policy buyer with three death benefit payout options. In addition, policy buyers can also choose to enhance the coverage that they receive by availing the optional Critical Illness Benefit. Under this benefit, policyholders can choose the Comprehensive Cover which provides coverage against 34 critical illnesses, the Major Illnesses Cover which provides coverage against 15 major critical illnesses, or the Heart & Cancer Cover which provides coverage against 9 heart- and cancer-related illnesses.

    4. SBI Life - Poorna Suraksha Plan: The Poorna Suraksha Plan from SBI LIfe is a non-linked, term insurance policy that also offers an in-built cover for critical illnesses.  The critical illness benefit will be paid to the policyholder upon diagnosis of the disease. Policyholders can only avail this benefit once during the policy tenure. This policy covers around 36 major illnesses/surgeries.

    5. ICICI Pru iProtect Smart Plan: The iProtect Smart from ICICI Prudential Life Insurance is a term insurance policy that not only provides a life cover to the policyholder, but also offers an optional cover against up to 34 different critical illnesses. The benefit amount will be paid upon diagnosis of the disease.

    Critical illness riders are a must-have if you want to protect yourself from unplanned expenses in the event of a medical emergency. Thus, when looking for a term insurance policy to purchase, make sure to check if the plan offers an inbuilt critical illness cover or if the insurer offers an additional critical illness rider that you can buy along with your policy.