Suresh was sure that he had to buy a term insurance plan to protect his family's future. However, he was confused, whether he needs a critical illness benefit along with his term plan since he already has a basic health insurance plan.
Like Suresh, most of us have the same thought! First and foremost we have to understand that a critical illness benefit is different from a regular health insurance plan. Critical illnesses like cancer, or heart attack or organ failure come without a prior warning and can dry out a person’s finances in an unprecedented way.
A term plan is the simplest and most cost-effective type of insurance product. They are designed to ensure that in the event of the policy holder’s death, the family gets the sum assured.
Basic term plans provide death benefit i.e. a sum of money is paid to the nominee if the policyholder dies during the policy term. The policyholder also gets a range of options to get enhanced protection.
One such option is a critical illness cover. It is best to have a term plan with a critical illness benefit.
Five reasons why your term plan must have a critical illness benefit:
- It acts as an income replacement
- Premiums stay the same
- Dual tax benefits on premium paid under sec 80C and 80D
- Provides a huge sum assured or cover that can take care of treatment cost & day-to-day expenses
- The advance treatments require huge cash disposition. The lump sum amount in a critical illness coverage increases chances of survival
A term insurance plan that comes with a critical illness benefit covers even non-hospitalization expenses and provides much-needed cash flow during the recovery period. Alternatively, you can go for a higher health cover as a regular health cover provides a much wider coverage.
If the patient happens to be the sole bread earner as then there is no source of income at all and the going gets tough. With an increase in medical bills, household expenses, outstanding loan amounts it becomes difficult for the patient to focus on recovery. In this situation, not just the patient but the entire family is devastated.
Take cancer, for instance, that alone accounts for 7 percent of deaths in India. The average cost involved in treating cancer is more than Rs 20 Lakh.
It is important to be prepared to handle such a situation and with a critical illness cover along with a term plan you can live stress-free as you get the lumpsum amount on diagnosis itself.
This amount can be used to pay off your mortgage, debts or any other liability you may have, or even pay for advanced treatment overseas.
Things to consider before going in for critical illness cover:
Read the list of all critical illness insurance coverages included in your policy.
Study the risk coverage towards different critical illnesses. Study them carefully before incorporating them.
Today, diseases like cancers, cardiovascular diseases, chronic respiratory diseases, and diabetes, are the chief killers in the subcontinent these four diseases alone account for 60 percent of total deaths in India.
It is imperative to consider having a critical illness cover with a basic term insurance as you wouldn’t want your family members and yourself to face financial difficulties during such uncertainties.