How critical illness rider can be a lifesaver!

9th January 2017

Life is critical and many individuals realize it well enough to insure their lives early on. What is true for life holds true even for critical events or mishaps that may not claim lives, but can leave a lasting impact on the individual and his finances.

We are talking critical illness over here.

Critical illness is a health related condition of a serious nature. It leaves a devastating effect on the individual’s personal lifestyle as also the family more so, if he happens to be the breadwinner. The treatment and medical cost is beyond most individuals / families. So without some form of financial backup, a critical illness can be a huge setback in more ways than one.

Fortunately, the ‘financial backup’ is at hand.

How riders boost your life cover

Insurance companies are known to offer riders on their plans – be it term plans, endowment plans or ULIP plans (unit-linked insurance plans).

Riders act as add-ons to the insurance plan. The add-on is in fact a supplementary cover that is triggered under certain conditions. The rider benefit adds to the life cover on the primary insurance policy.

This simple equation captures how riders work:

Rider + insurance plan = enhanced cover

The critical illnesses covered by the rider

Typically, the critical illness rider covers illnesses like:

  • Alzheimer’s Disease
  • Benign Brain Tumor
  • Blindness
  • Brain Surgery
  • Cancer
  • Deafness
  • First Heart Attack of a Specified Severity
  • Kidney Failure Requiring Regular Dialysis
  • Major Head Trauma
  • Major Burns
  • Multiple Sclerosis
  • Permanent Paralysis of Limbs
  • Parkinson’s Diseases
  • Stroke
  • Aorta graft surgery

These are some of the more common critical illnesses. It is best to verify with the insurance company (or the agent) for specific illnesses and features since various insurers have varying rider terms.

An online term plan for Samir

Take Samir, a 35 year old married professional in the private sector. He has a 4-year old daughter.

Samir has opted for term insurance plan given the affordable premiums which allows him to go for a larger life cover in line with his family’s needs and financial obligations.

Being internet savvy Samir played smart in buying the term plan online. This helped him in a variety of ways such as:

  1. Lower premiums vis-à-vis offline term plans
  2. Discount on the already low premiums thanks to Samir’s ‘healthy’ lifestyle (he is a non-smoker)
  3. Waiver of medical tests

But the really smart part about buying the online term plan was in opting for certain riders like critical illness in particular.

How critical illness rider works for Samir

Assume that at 40 years age, Samir is afflicted with a critical illness, a heart ailment requiring urgent angioplasty that is covered under his online term plan.

Under the rider terms Samir will receive a specific sum (e.g. 75% of total cover) towards the angioplasty. The amount is disbursed regardless of the actual angioplasty expenses.

His insurance cover as also the rider continues. While Samir cannot claim rider benefit towards another heart ailment, he can avail of the same in case of a different critical illness covered by the policy like kidney failure for instance.

Since the life cover continues even after the incidence of critical illness, the family can avail of death benefit on Samir’s unfortunate death over the policy tenure.

Tax benefit on rider premiums

Samir can claim tax benefit under Section 80C on the total premium paid out on his term plan i.e. including critical illness rider premium as also other riders.

Critical illnesses are fairly common and nowhere as rare as they were once. Apart from the emotional and physiological trauma of dealing with critical illnesses, there is the tremendous financial strain on the family. This makes it critical for families to create a safety net to deal with such illnesses. What response can be more effective than the critical illness rider?

Bajaj Allianz Life eTouch Online Term Insurance Plan, is a regular premium payment, pure term and health cover plan. The plan provides life cover combined with benefit on accidental death, accidental total permanent disability & critical illness and benefit of waiver of premium, depending on the variant opted by you. This 3 in 1 plan gives the comfort of a Complete Protection Solution aimed at covering against all 3 D’s – Death | Disability | Disease at a competitive price point , with the flexibility to choose from a 40 year long term and a simple 3 step buy process. This is the 1st plan in the market which offers Waiver of Premium on Accidental Permanent Total Disability Cover and Critical Illness Cover in its Shield Supreme Variant. Also, in case of an unfortunate event, the nominee can opt to take the claim settlement benefit in five customizable options like equal or increasing monthly instalments or part lump-sum & balance in instalments.

Bajaj Allianz Life Insurance company has one of the best claim settlement ratios of 98.1%* & is one of the most preferred brands to invest in for a Jiyo Befikar.



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