Do you know the benefits of a term insurance plan? Besides
the low premiums, which are an obvious favorite, the plan fulfills the most
basic life goal – income replacement. By providing a combination of a high Sum Assured and cheapest premiums, a term insurance plan ensures financial security for the family if the
insured dies pre-maturely. As such, a term plan is very popular among many of
us.
Have you invested in a term insurance plan? Great! Have you
included a Critical Illness Rider in your Term plan?
Riders, like the insurance plan, are also a very beneficial
component. It is mostly because of our ignorance that we overlook riders when
we buy a term plan. Take the instance of the Critical Illness itself. Despite being beneficial, how many of
us have included it in our term plan? Not many. So, let us put our ignorance to
rest and understand what a Critical Illness Rider is and how it is important.
What is a Critical
Illness Rider?
Riders are additional benefits which can be added to our
basic insurance plan for increased benefits. It covers specific critical
illnesses. If we suffer from any of the covered critical illness, the rider
pays us an additional Sum Assured in lump sum. This benefit is paid simply on
diagnosis of our illness irrespective of whether we die or avail treatment for
the same.
What is the
importance of including the Critical Illness Rider with our Term Insurance
Plan?
·
Critical
Illnesses are common and financially difficult
Do you know why Critical Illnesses are called so? These
illnesses are severe, fatal and chronic. They involve complicated medical
treatments and procedures. Do you know the cost of such procedures? Let’s just
say that the costs are magnanimous. Juxtaposed to this, critical illnesses are
also becoming very common nowadays. Whether you talk about cancer, stroke,
heart attacks or organ failures, critical illnesses are on the rise. This
deadly combination of increasing illnesses and high medical costs is a curse
for us, both physiologically and financially. Critical Illness Riders, by
providing financial support, help in taking care of the financial aspect of the
illness which would otherwise be difficult for us.
·
The rider
increases the scope of cover
Our term insurance plan pays the benefit only in case of
pre-mature death. What happens if we are merely diagnosed with an illness which
might not cause death? Would the term plan pay? No, it won’t. But, a critical
illness, though not fatal, does require considerable funds for its treatment. A
Illness Rider comes into the picture here. Since the rider pays the benefit on
mere diagnosis of the ailment, it provides us with the required funds for the
treatment of the illness. As such, the rider increases the scope of coverage.
·
The rider
helps in replacing your income
When we suffer from a critical illness, we are forced to
take a break from work. As such, our income stops. The benefit paid by the
rider can be used to replace this income and meet the day-to-day living
expenses of us and our family.
·
The rider
saves additional tax
The premiums you pay for your term plan is exempt from
taxation under Section 80C. If you
also include a Critical Illness Rider, you get an additional tax exemption under Section 80D. Thus, the rider
helps you in claiming additional tax exemption.
A critical illness rider, thus, has various benefits. These
benefits can be yours if you include the rider in your term plan. If you are
worried about the additional premium outgo, relax! Rider premiums are minimal.
By paying a fraction of your term insurance premium, you can add the rider to
your basic plan. Do the math yourself. Do a term insurance comparison, or a Term insurance with return of premium
comparison both with and without the rider and you would understand the
cost-benefit aspect of the Illness rider. With so many benefits promised by the
rider at the lowest possible cost, isn’t it prudent to add it to your term
plan?
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