Should You Include a Critical Illness Cover with Your Term Insurance Plan?

 Should You Include a Critical Illness Cover with Your Term Insurance Plan?

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None of us ever want to think of a day when our loved ones or we are critically ill. The thought itself is petrifying, but the situation can turn into a bigger nightmare when insufficient financial assistance stands in the way of treatment. In the race of leaving no stone unturned for the benefit and comfort of our family, we sometimes end up neglecting ourselves and the things that we must do for our own good. One of which is buying the best term insurance plan.

But buying the best term plan is not enough, and we need to think of other ways to safeguard ourselves from the serious health issues that are becoming increasingly common in today’s times.

Given the rising healthcare costs, a critical illness can drain you out of your savings sooner than you think. While nothing can take away the pain of a family struggling with the consequences of the critical disease, some financial assistance can leverage the stress from their shoulders. This is why buying the best term plan that has a critical illness rider is very important these days.

What is a critical illness rider?

A critical illness rider is an add-on to your best term plan that accounts for covering all your medical costs in case you are diagnosed with a critical life-threatening illness or permanent disability. This rider includes most of your medical charges like hospitalization fees, rehabilitation costs, diagnosis fee, etc. There are several riders that even furnish a supplementary cash flow if the life insured becomes immobile.

Combining a term plan with a critical illness rider can be extremely beneficial. Here are 5 reasons why you should include a critical illness rider with your best term insurance plan

  1. Provides supplementary income

There are a lot of critical illness riders that serve as a secondary source of income in case the life insured is immobile or disabled due to an illness. This rider acts as a supplementary income to ensure that the day-to-day expenses of the family can be met, and any expense made in the diagnosis and treatment of the underlying illness can also be covered.

  1. Comes at the same premium as your term insurance plan

When you opt for a critical illness rider on your term plan, the premium amount will not be increased and remains the same as your basic term plan. On the first diagnosis of a critical illness, you will be paid the designated amount as proposed in the proposal form. Your basic term insurance will then continue on the earlier sum assured minus the critical illness rider benefit given to you. Hence, the premium remains the same until the maturity of the policy.

There are some companies that offer critical illness rider at a separate premium amount apart from the basic term plan. In that case, the sum assured for the term plan remains the same even after taking the rider benefit accounting for a higher sum assured in totality.

  1. Added tax benefits

Critical illness rider comes with an added tax benefit that, i.e. both the insurance premium and the rider premium are eligible for tax deductions under Sections 80C and 80D of the Income Tax Act of 1961.

  1. Umbrella coverage over major life-threatening diseases

The critical illness rider over your best term plan covers all major life-threatening diseases like:

  1. Cancer
  2. Heart attack
  3. Paralysis
  4. Kidney failure
  5. Organ transplant like pancreas, heart, kidney
  6. Bypass surgery (Coronary Artery)
  7. Stroke
  1. Covers both hospitalization and non-hospitalization charges

Under the critical illness rider, both hospitalization and day to day expenses are covered in the treatment of a critical illness. This means your overall treatment, be it within or outside the hospital premises, is covered under your policy. This also includes the cost of over the counter medicines.


Health is the primary factor to ensure and endure a happy life, but due to unavoidable reasons and fast-paced lifestyles, we have been ignoring our health running after other priorities. Opting for the best term plan enhanced with a critical illness rider can be helpful to overcome some of these issues.

Dana Heald

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