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Benefits of Term Insurance with Critical Illness Rider

A term insurance plan is an important insurance product in the industry.

  • 8,645 Views | Updated on: Feb 23, 2024

A term insurance plan is an important insurance product in the industry. It offers a high sum assured at a low premium and provides financial security to your loved ones in your absence. Many people prefer a term insurance policy as compared to a traditional life insurance plan. Once you understand what term insurance is, you will be in a position to consider riders/add-on covers for your term plan. However, not many are aware of the benefits offered by an add-on cover to the term plan. If you buy add-ons for your policy, you will get an enhanced cover and your life becomes easier.

What are riders in insurance?

A rider is an additional benefit on your term insurance and it will come into play in case of a specific eventuality. It is over and above the basic term insurance cover. A rider is included in your term insurance plan or you have to opt for it. Based on your health and needs, you can choose term insurance with critical illness rider as a value-added insurance cover for critical illnesses. Riders are of different types and based on your plan, you can choose the one that works the best for you. While buying a term plan, availing of a critical illness rider is essential. Such a rider will provide for extra financial assistance in case of a medical emergency. An illness or an accident can come unannounced and this is when a critical illness rider helps. You need to understand how this rider works. When you have a rider for the policy, you will receive a lump sum on the diagnosis of a critical illness, which is specified in the policy. As per the terms and conditions of the policy, the detection of critical illness could terminate or continue and it is important to check the coverage very carefully before you decide on a rider. There are innovative critical illness riders, which include different diseases including lifestyle disease.

What are the Benefits of term insurance with critical illness rider?

Term insurance along with a critical illness rider has a host of benefits to offer. Some of these are listed below.

  • You can use this rider will act as a tool for income replacement
  • You can avail of the rider to take care of the medical expenses
  • You will get a double tax benefit
  • You can take additional coverage for major diseases like cancer, heart attack, paralysis, organ transplant, bypass surgery, kidney failure, and stroke

Things to keep in mind when buying a rider

Here are a few things you need to consider before you buy a critical illness rider.

  • The rider provides for tax benefit under Section 80C and 80D of the Income Tax Act
  • The sum assured amount chosen under the plan is payable in case of total permanent disability or demise of the insured
  • The benefit amount payable will be equal to the critical illness cover you have chosen
  • The benefit will be paid at the time of first diagnosis itself as there is no minimum survival period required
  • The premiums can be paid in installments

Consider your present health condition and financial requirement before you purchase a term plan. This will help you make a well-informed decision about choosing suitable riders.

- A Consumer Education Initiative series by Kotak Life

Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

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