Importance of Having Term Insurance with Critical Illness and Disability Riders

Critical Illness cover and disability rider benefits are essential requirements in a Term Insurance Plan.
These covers and benefits also help customers to choose a particular term insurance plan. Knowing about Term Plans with Critical Illness and Disability Rider is necessary if an individual decides on choosing a plan.

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What is Term Plan with Critical Illness and Disability Rider?

Term Plan with Critical Illness and Disability Rider provides coverage for various critical Illnesses and Terminal Illnesses. 

In Term Plan Critical Illness Rider, if the insured is diagnosed with any critical illness covered by the plan, they will be given a lump sum amount to treat such diseases. When it comes to the Disability Rider, if the insured is sick, injured, or unable to work, then the insurer will support him financially through the plan.

Some term plans also provide coverage during times of disability of the insured. Some plans cover more than 40 critical illnesses. Critical Illnesses provides coverage for hospitalization or medical and surgery expenses under a particular plan. Disability Rider provides for permanent disabilities of a customer. This benefit acts as a monthly income if the customer loses his job or cannot work due to any disability.

When can Critical Illness and Disability Riders be Helpful?

There are various times when a Term Plan with critical illness and disability rider will be helpful. Details on when a term plan with critical illness and disability rider will be beneficial are provided below. 

Critical Illness coverage is provided for a set of chosen illnesses under a particular plan. Under this option, coverage is provided for hospitalization, medication and surgery expenses that happened due to any critical illness mentioned in the plan. With critical illness insurance, a customer can stay stress-free about any hospital expense and focus on recovery during their Illness. 

Some critical illnesses that are commonly covered by various term insurance plans with rider are:

  • Heart Attack
  • Heart Valve Replacement 
  • Aorta surgery 
  • Coronary artery diseases, bypass or other surgery
  • Stroke
  • Cancer
  • Kidney failure
  • Viral Hepatitis
  • Liver Failure
  • Major Organ Transplant (for Heart, Kidney, Bone Marrow, Lungs, and Liver)
  • Paralysis
  • Multiple sclerosis
  • Alzheimer’s Disease
  • Coma
  • Terminal Illness
  • Anaemia
  • Diabetes
  • Brain Surgery etc.

Disability Rider is one of the valuable add-on benefits that an insurance provider can offer to their customers. Disability Income rider benefits paid to the customer with a disability is a monthly income of 1% of the sum assured to be provided during the policy's maturity.

Disability Rider benefits will only be applicable for people with permanent disabilities. The policyholder must have been disabled for at least six months prior to receiving any income or benefit under disability rider. 

Some common disabilities covered by the disability rider cover are:

  • Permanent Blindness
  • Leprosy
  • Deafness
  • Paralysis
  • Dwarfism
  • Intellectual Disability
  • Mental Illness
  • Autism Spectrum Disorder
  • Cerebral Palsy
  • Muscular Dystrophy
  • Parkinson’s Disease
  • Dystonia
  • Neuromuscular disease
  • Multiple Sclerosis
  • Epilepsy
  • Thalassemia
  • Haemophilia
  • Sickle Cell Disease
  • Acid Attack Victims

Reasons to Choose a Term Plan with Critical illness and Disability Riders

Term insurance plan along with the value-added Critical Illness and Disability Riders offers several benefits to the insured. Various reasons why the insured must choose the critical illness and disability riders with the term plan are listed below:

  • In most of the term plans with critical illness riders, the insurance holder need not pay the extra premium for the riders. The premium payment will be the same for the entire tenure of the policy. Even if the insured is diagnosed with any critical illness, there will be no change in the premium amount. In addition, the option of insurance waive off is available to the insured when they are prone to the illness. 
  • The Insured can take care of the daily medical along with the hospital expenses with the add-ons.
  • Tax benefits: Insured can enjoy the double tax benefits along with the benefits of riders. Insured can avail tax benefit on premiums (up to Rs 1.5 lakh) under Section 80C and the add-on benefits from the plan under Section 10(10D) of the Income Tax Act. (Tax benefits are subject to change as per the prevailing tax laws. Standard T&C apply)
  • These critical illness riders can also become the income replacement source for the insured. Suppose the insured has to face a situation where they have undergone any disability or are diagnosed with any critical ailments. In such a situation, these riders will replace the income of the insured to meet their daily expenses.  
  • These riders will cover the most common diseases such as Heart attack, Paralysis, Organ transplantation (Kidney, Herat, Pancreas), Kidney failure, Bypass, Surgery, Stroke, and Cancer etc., 
  • When the insured is the breadwinner of the family: if the insured's family members depend on the insured earnings, then in such cases, even if the insured is unable to work, these riders will support their dependents to meet their survival expenses. 
  • This critical illness and disability riders apply even to the healthier and young persons. The premiums for healthy and young people are less when compared to others. Such persons will get regular income from these riders when they cannot attend their work due to their illness or any injuries. 
  • In the absence of an insurance policy with such riders, one may not be able to afford the high medical expenses. Having a term insurance plan with a critical illness rider in the hand of the insured will get the funds from the policy to treat their ailments in time.

How do the Critical Illness and Disability Riders Work?

The insured that opted for Critical Illness and Disability Rider is allowed to get their portion in their accelerated death benefit if they contracted with any critical ailments or disability. These benefits are offered to the insured only for the specified listed terminal disease in the policy.

When the insured faced the point of illness diagnosis, then they have to face two choices such as:

1. Insured can accelerate and get some portion of the sum assured while they are living. 


2. Make accessible the entire lump sum amount to the nominees or the beneficiaries of the insured on their demise. 

In addition, the insured is allowed to get the benefit from such riders for the hospitalization and non-hospitalization expenses, provided such expenses are covered by the term plan with the terminal illness riders. Also, in some plans with the said riders, the insured can get payouts in the form of a regular income supply from the insurer during their recovery period.

Thing to Consider While Buying Term Plan with Riders

The insured need to be aware of some basic information before opting for the Critical Illness and Disability Riders, such as:

  • The insurer's benefit amount payable to the insured is equal to the opted critical illness and disability coverage.
  • The option of premium payments in intervals.
  • The assured sum should be payable to the insured on their demise or their permanent total disability.  
  • The said riders benefit will be paid to the insured at the time of the first diagnosis only or later.
  • There is no minimum requirement for the insured survival period.

To Conclude!

As discussed above, there are various benefits of having term insurance with critical illness and disability riders. Customers must know their Insurance plan well before choosing them. Sum assured amount for such term plans starts from 5 lakh to 50 lakh. Some plans provide accidental benefits of up to 1 crore. Thus, one can choose according to his/her requirement.

Written By: PolicyBazaar

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