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Term Insurance with Critical Illness

Term insurance with critical illness coverage can help you protect your family and finances in the event of a critical illness. Read this blog further to know more.

  • 5,054 Views | Updated on: May 30, 2024

In today’s uncertain world, the potential for unexpected health challenges and medical emergencies is an ever-present reality. Critical illnesses, such as stroke, cancer, heart disease, and organ failure, can significantly impact your life and finances. Dealing with the financial burden of medical treatments and the loss of income during recovery can add even more strain to an already difficult situation. To mitigate these concerns, many individuals are turning to critical illness insurance or term insurance with critical illness benefits as a protective measure.

Term life insurance is devised to provide a death benefit to the nominees if the insured person passes away within the defined term of the policy. It offers pure life coverage, meaning that it does not accumulate any cash value over time. In the event of the policyholder’s death, the nominated beneficiaries receive the predetermined death benefit amount.

This blog will discuss briefly about the benefits of critical illness rider with term insurance and how it can help you during medical emergencies.

Term Insurance: A Brief Intro

Term insurance is a kind of life insurance that offers coverage for a specific period of time. If the insured person passes during the period of the policy, the death benefit is paid out to the nominee. Term insurance is the most basic and affordable type of life insurance, and it is a good option if you want to protect your family financially in the event of your demise. Here are some of the key features of term insurance:


Term insurance provides a death benefit to your beneficiaries if you pass away during the term of the policy. The death benefit is a lump sum payment that is typically tax-free and can be used by your loved ones to cover daily living expenses.


It typically offers lower premium rates compared to other types of life insurance, such as whole life or universal life insurance. The premiums are based on factors like your age, health, lifestyle, coverage amount, and the length of the term. The younger and healthier you are, the lower the premiums are likely to be.


Many term insurance policies offer a conversion feature, which allows you to convert the policy into a permanent life insurance policy, such as whole life or universal life insurance, without the need for a medical exam or proving insurability. This feature is particularly beneficial if your circumstances change and you require lifelong coverage or a cash value component.

Benefits of Term Insurance

If you are willing to buy life insurance, term insurance is a good option to consider. It is affordable, provides coverage for a specific period of time, and can be converted to a permanent life insurance policy if desired.

Here are some of the benefits of term insurance:

Protects your Family

In the event of your death, term insurance can provide a financial cushion for your loved ones. It can help them cover expenses such as education, debts, funeral costs, and living expenses.


In particular, if you are the only source of income for your family, you must ensure their safety while you are away. While you can accomplish this with a variety of life insurance products, term insurance is the most affordable life insurance option on the market.

Guaranteed Death Benefit

Term insurance offers death benefits that can support your family in case of your demise. If you pass away during the policy term, your beneficiaries will receive a lump sum payment from the insurers.

Did You Know?

The majority of term insurance policies allow policyholders to increase the number of lives covered later. As a result, you can quickly increase the sum assured at various stages of life in accordance with your needs.

Critical Illness Benefit with Term Insurance

Term life insurance with critical illness protection combines the advantages of a term policy with extra security against serious illnesses. It provides financial security to policyholders and their families by offering a lump sum payment in the event of the insured’s death or the diagnosis of a critical health condition during the policy term.

Term life insurance pays for the death benefit to the nominees. In contrast, critical illness coverage offers protection in case the insured person is diagnosed with a specified critical illness listed in the policy. By combining term life insurance with critical illness coverage, policyholders gain comprehensive protection. If they pass away during the policy term, the death benefit is paid out to their beneficiaries. If they survive a critical illness, they receive a lump sum payment to aid in their recovery, pay for medical expenses, and alleviate any financial burdens that may arise.

Who Should Buy Term Insurance with Critical Illness Cover

Term insurance with critical illness rider can be availed by anybody, but here are a few categories of people who should go for it:

People with an Illness history

Many people come with hereditary illnesses that are bound to flare up at some point in their lives. Since they are already prone to an illness, getting a critical illness cover should have a top priority.

Earning Members

If you are the earning member of your family wherein several members are dependent on you, getting a critical illness, insurance becomes a must. This ensures your family’s financial safety in case of an eventuality.

People over the Age of 40

Post this age, people are generally at a higher risk of developing chronic illnesses, so buying a critical illness policy is advisable.

Eligibility for Term Insurance with Critical Illness

The specific eligibility criteria for term insurance can vary among insurance providers and policies. However, there are some common factors that insurers consider when determining an individual’s eligibility. Here are some typical requirements:


Most insurance companies have minimum and maximum age limits for term insurance. Generally, the minimum age requirement is around 18 years, and the maximum age limit can range from 60 to 75 years, depending on the insurer and the policy.

Health Condition

Insurers assess the applicant’s health condition to determine their insurability. They may require the applicant to undergo a medical examination or provide medical records to evaluate their health status. Factors such as pre-existing medical conditions, lifestyle habits (like smoking), and family medical history may also be considered.

Policy Term

Insurance providers can have specific requirements regarding the term length for term insurance policies. While shorter terms, such as 5 or 10 years, are commonly available, longer terms, may have different eligibility criteria.

Insurability Risk

Insurance firms evaluate the risk associated with insuring an individual based on various factors. These can include the applicant’s lifestyle choices, participation in hazardous activities, travel to high-risk locations, or engagement in risky hobbies. Such factors may affect the premium rates or even the eligibility for coverage.

Certain factors like tobacco use, alcohol consumption, and a history of serious illnesses can impact eligibility and premiums. It’s crucial to provide accurate and complete information during the application process to ensure transparency and avoid any problems with the policy in the future.

Critical Illnesses Covered by Term Insurance

Usually, banks or insurance companies have their categories of critical illnesses with their respective terms and conditions, so it is quite common to find differences across these plans. However, here is a list of illnesses that are generally covered:

  • Alzheimer’s Disease
  • Angioplasty
  • Apallic Syndrome
  • Aplastic Anaemia
  • Brain Surgery
  • Cancer
  • Coma
  • Deafness
  • Blindness
  • Major Burns
  • Encephalitis
  • Heart Surgery
  • Parkinson’s Disease

Wrapping It Up

Critical illness benefits can be added as a rider to a pre-existing term Insurance that you might have. People generally go for term insurance with critical illness benefits, which provides them with large additional coverage. It offers financial security to the insured and their loved ones, ensuring that they are financially protected in difficult times. By carefully assessing individual needs and comparing different policies, you can find the right coverage to suit their specific circumstances and ensure peace of mind. If you want to protect your health and ensure your family’s safety, choose the rider with maximum benefits today!

Key Takeaways

  • Term insurance provides financial protection for your loved ones in case of your demise.
  • Critical illness coverage can offer a lump sum payment to help you pay for medical expenses and other costs if you are diagnosed with a critical illness.
  • Term insurance with critical illness coverage can provide comprehensive financial protection for you and your loved ones.
  • There are a variety of term insurance policies and critical illness riders available, so it is important to compare different options to find the best policy for your needs.

- 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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