Term insurance is the answer to the one of the most appalling questions- ‘What if I die tomorrow, how my family will survive? If you have a term insurance plan then you don’t need to worry. The insurer will pay sum assured to your nominee in case of your sudden demise.

However, what will happen to you or your family, if you are alive but unable to earn due to a critical illness? On top of that, you have to bear hefty medical expenses also. At this stage, even term insurance coverage of Rs 1 crore is futile. The insurer pays money upon death of the policy holder but In this case, you are alive. So, how will you deal with this situation? Here comes the term insurance plan with critical illness benefit.

Buying a Term Plan, Read Before you Move Further

Besides covering life of the policyholder, the plan gives coverage against 34 critical illness ailments, such as cancer, chronic lung disease, brain surgery, and benign brain tumor. When a major illness strikes, the insurer pays critical illness benefits to the policyholder or nominee, irrespective of the actual medical expenditure incurred. The premium payment on the critical illness benefit will cease after the payout of critical illness benefit and the policy will continue with death benefits only. Many policies, such as ICICI Prudential’s iProtect Smart plan waives off future premiums if one is permanently disabled and not in a financial state to pay future premiums. Further, the policy also pays out in the event of terminal illness and accidental death and hence, gives a complete 360 degree cover.

There are few more things alarming than critical ailments. One is not having sufficient funds for treatment. For instance, every year, 10 lakh new cancer cases are reported in India. The cancer drug, Herceptin, one of the most effective cancer drugs, costs over Rs 60,000 per vial. A cancer patient needs 6 to 17 vials for treatment.  Since treatment of critical ailments is long-term in nature, it can translate into recurring expenses. To tide over such medical expenses, it is advised to buy a term plan that comes with critical illness benefits.

Top three reasons to buy a term insurance with critical illness benefit

  • Continuity of life cover: Once the critical ailment benefit is paid out to the insured, the policy continues to provide life cover. For instance, if someone chooses Rs 50 lakhs life cover with a critical illness benefit of Rs 20 lakhs, the insurer will pay critical illness benefits of Rs 20 lakhs upfront on the detection of any of the critical ailments covered under the policy. The future premiums payable under the policy for death benefits will reduce proportionately and the policy will continue with Rs 50 lakhs sum assured in this case.
  • Acts as the income replacement: A term insurance with critical illness benefit cover offers sum assured that can be used to pay recovery expenses, mortgage, debts or any other liability.
  • Double tax benefits: A term insurance with critical illness coverage gets double tax benefits of up to Rs 1,50,000 and Rs 25,000 under Sections 80C and 80D respectively.

Conclusion

One grim statistics of WHO is that every year roughly 5.8 million Indians die from lung and heart diseases, diabetes and cancer. It is important to have a critical illness ailment cover in a term insurance as you would not like to be caught in a situation where due to funds shortage; you need to give up your treatment in a mid-way. Further, such policies can be easily bought online on a few clicks. All you need to do is fill the insurance proposal form with your correct details.

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