Critical Illness Rider in ULIP

What is a Critical Illness Rider in ULIP?

A ULIP can be customised to provide additional financial security for various life situations. A critical illness rider is an optional add-on benefit which can be added to your ULIP and pays a lump-sum payout to the policyholder if they are diagnosed with a specific life-threatening disease. Adding a critical illness rider to your plan can help you further enhance it by coupling wealth building with health protection.

How Does a Critical Illness Rider Work in ULIP?

A critical illness rider uses a simple step-by-step process to provide you with the financial support needed for your treatment.

• Adding the rider to your ULIP: You can opt to add the critical illness rider when buying your ULIP or during policy renewal. A fixed premium will have to be paid for the rider throughout the term of the policy.
• Diagnosis of an illness covered under the rider: If you are diagnosed with a life-threatening disease which is covered under the rider, you can apply for a claim.
• Applying for the claim: You can simply claim the rider based on your diagnosis report. You can receive your payout after submitting your medical documents or a doctor’s certificate which can corroborate your diagnosis.
• Receive your lump sum amount: A one-time fixed lump sum will be paid to you once the claim is verified by the insurer. You can use the money for hospitalisation, specialised treatments or medications. There is no restriction on the usage of the lump sum amount.
• Continuation of your base policy and investments: Your base policy continues even if you claim your critical illness rider benefit.

What Critical Illnesses Are Covered Under a ULIP Rider?

A wide range of illnesses is covered under the critical illness rider. While coverage for specific diseases can vary as per your insurer, the following illnesses are generally covered by most insurers.

• Cancer
• Heart condition
• Neurological disorder
• Kidney disease
• Organ failure
• Other conditions like burns, sclerosis and coma

What are the exclusions under a Critical Illness Rider?

• There are certain cause-based exclusions under a critical illness rider. Note that, like the inclusions, the exclusions also purely depend on the insurer.
• Pre-existing illnesses and conditions not disclosed when buying the policy
• Self-inflicted injury or suicide attempt
• Illness caused due to substance usage
• HIV/AIDS related illness
• Any participation in hazardous activities and sports is excluded
• Nuclear, biological and chemical contamination-related illness is not covered.
• Any illness or injury due to a criminal act
• Any illness present from birth is not covered

What is the Waiting Period and Survival Period for a Critical Illness Rider in ULIP?

• Waiting Period: A waiting period is the window during which you cannot make a claim under the critical illness rider. This window starts as soon as you buy your policy. It is thus recommended to compare plans and their critical illness riders and choose policies with a shorter waiting period to ensure that you are financially covered as soon as possible.
• Survival Period: The survival period clause is one of the most important factors to check when choosing a plan and a critical illness rider. The clause requires you to verify whether the insurer needs to survive for a specified duration after diagnosis before the benefit amount is disbursed to you. Ensure you review the plan on the aforementioned factors before you choose one and get the maximum benefit out of your premiums.

Critical Illness Rider Vs Health Insurance

The following table lists the key differences between a critical illness rider and health insurance.

Conclusion

A critical illness rider can be an essential add-on to your ULIP as health is not guaranteed in today’s day and age. A critical illness rider can help you get an immediate lump sum payout which can cover the cost of your treatment without any delay. Ensure you read the terms and conditions of the ULIP and its rider before choosing a plan to best optimise your investments.