When you are young, you might chase your dreams and ambitions. Due to the objective of a strong career background at a young age, you might ignore your health. However, your health should be a top priority irrespective of all your goals. To look after your health with adequate financial backup, you should buy term insurance plan with a critical illness cover for your physical well-being. Therefore, let’s understand what a critical illness cover under term insurance is in detail:
What is a critical illness cover under term insurance plans?
A critical illness cover is an add-on cover or a rider that can enhance the base term coverage of your policy. Since a term policy might not cover critical illness, many insurance companies offer a critical illness cover that can look after you when you are diagnosed with life-threatening diseases. The number of diseases covered under a critical illness cover can vary from one insurer to another. The most common types of diseases covered under the critical illness cover can be as follows:
- Lung diseases
- Loss of limbs
- Brain tumour
- Cardiovascular diseases, etc.
Under term insurance policies, a critical illness cover should be purchased separately. Hence, many of you might assume that it can charge more money. Since you might assume that a critical illness cover might be expensive, you might not buy it. However, there are the top four reasons mentioned below that highlight why a critical illness cover is essential:
- It can increase your survival period
After the diagnosis of severe health conditions, such as cancer, kidney failure, and so on, many of you might ignore the treatments of diseases due to inadequate funds. When you avoid the treatments of life-threatening diseases, it can lead to death. If you have a critical illness cover under such a scenario, you can undergo medical treatments without financial constraints, which in turn can increase the chances of your survival.
- It can cover the sky-rocketing medical bills
Medical inflation has been growing at an alarming rate. According to a report, medical inflation has increased from 4.39% to 7.14% today in India. Due to the increasing rate of medical inflation, there has been a significant rise in hospital bills. Therefore, it can be essential to have a critical illness cover that can cover the skyrocketing medical bills without burning a hole in your pocket. Apart from receiving financial backup for your hospital bills, the payout received from a critical illness cover can also be helpful in meeting your routine expenses.
- It can provide a consistent premium amount
Although a critical illness cover can be an addition on top of your term policy, the premium can continue to remain the same until the on-going tenure. For instance, if you have been diagnosed with a critical illness, your insurer can neither increase nor decrease the term policy irrespective of the severity of the disease. Moreover, some insurance companies can even waive the term insurance premium off on the diagnosis of critical illnesses.
- It can guarantee tax benefits
Since a critical illness cover is a part of the term insurance policy, it can qualify for deductions available under Section 80C of the Income Tax Act, 1961. As per Section 80C, you can claim a deduction up to Rs. 1, 50,000 on your taxable income. In addition to this, the term insurance benefits can be tax-free in accordance with Section 10(10D) of the Income Tax Act, 1961.
In a nutshell, a critical illness cover, along with term insurance, can be a value-added addition to your portfolio. At the time of purchase, see to it that you compare multiple term insurance plans in India and choose the right term plan along with a critical illness cover. In case you are looking for convenience, choosing an online term plan can help. An online term plan can be chosen in minimal time with adequate cover and riders. Although it’s never too late to invest in a health plan with adequate cover, make it a point to buy it this world health day!