Planning to Take a Critical Illness Rider while Buying Health Insurance

You stroll into your office cubical and are astounded to see your nearby partner back. You didn’t anticipate that he would join back this early after his unexpected and supposedly prolonged cancer treatment. On conversing with him, you get to know about his treatment by a famous expert of India. You ask him how he dealt with the significant expenses, and he grins. He answers that the critical illness rider with his health insurance plan dealt with it all. Presently, he needs to simply look forward.

What is Critical Illness Rider?

A critical illness rider in a policy is an add-on component that you get to purchase alongside your policy. It guarantees that a lump-sum amount gets added up if you were to be diagnosed with a critical illness pre-specified in your policy contract. Costs included in the treatment of a critical illness are sky-high. Critical illness rider prevents you from dipping into financial mayhem, by acting as additional coverage for traumatising medical contingencies like cancer, kidney failure, stroke, etc.

Why Critical Illness Rider with Health Insurance Plan?

According to 2019 statistics, 17 in every hundred people in the nation experience the ill effects of some type of kidney affliction. Shockingly, the stroke occurrence rate in India is a lot higher with around 1.8 million Indians experiencing a stroke every year. So, after reviewing these numbers, do you think that you need a critical illness benefit rider on your health insurance policy? If your answer is in the affirmative, it means that you are on the right track. Critical illness rider is a very important part of the health insurance plan. You often would be hearing in your social circle, incidents of one or the other person suffering from some kind of critical illness.

Everything comes with a cost!

Critical illness brings along it an immense amount of costs; both monetary and psychological. Making prior arrangement is a must. Regardless of whether you believe it or not, you will run out of reserve funds in the blink of an eye. Thus, medical coverage like critical illness rider along with health insurance plan is an absolute necessity. 

Since critical illness rider is an add-on benefit. The sum assured under critical illness is added as an additional cover in the total sum assured under your health insurance policy. The single amount sum will be paid to you if there should be an occurrence of life-threatening uncertainty. 

It would be clearer with an appropriate example- 

Let us assume that you have purchased health insurance with sum assured of Rs.1 crore with an additional critical illness rider of 10 lakhs. The premium would be charged on Rs.1 crore.  We also have to take the death benefit that the plan must provide.

Now, this may be explained by dividing critical illness rider into two branches-

1. Critical Illness rider as “Additional Benefit”- If you get detected with a pre-listed critical illness as per your contract, you would get cover of 10 lakhs. Your total sum assured will remain same, i.e., 1 crore and won’t be reduced by the amount of critical illness cover. This doesn’t affect the death benefit of the rider. Thus, the sum assured will remain higher than in that of accelerated benefit. 
2. Critical Illness rider as “Accelerated Benefit”- In case of diagnosis of critical illness and claim coverage, you are ought to get 10 lakhs. But now, the total sum assured will be reduced by the amount of claim under critical illness. Accelerated benefit reduces the death benefit of the rider as stated in the base policy. Thus, lowers the base sum assured.

The case gets worsen when you are sole bread earner and due to critical illness, you have no other option but to lay-back at home. Critical illness benefit rider reduces your mental trauma by lowering the cost disruption and offsetting the financial risk. 

BENEFITS OF CRITICAL ILLNESS RIDER-

Combination of critical illness rider and health insurance is a fairly popular product and gives you various advantages to enjoy-

1. Financial Back-up- In case of critical illness, you get paid automatically. In such circumstances, you either need to utilize your investment funds or persuasively get into a massive debt trap. Critical illness rider provides you with a lump-sum amount to pay-off debt, recovery expenses and expenses apart from hospitalisation expenses. In this way, it balances the monetary danger of your family.
   
2. Complimentary Health Insurance- Health Insurance is for general well-being needs but Critical Illness Insurance is a lot more explicit in nature. Critical Illness Rider fills in the gaps that are excluded from the Health insurance fine print. Health insurance plan can bear your medical costs somewhat however critical illness rider covers the weighty costs coming about because of critical illness by acting as a safeguard amid monetary trouble.
   
3. Coverage-Critical illness rider and health insurance plan together go about as remedial measure which makes sure about a safe and secure future. Health care coverage offers broad inclusion, it covers all your medical and hospitalization costs. Critical illness rider just satisfies explicit cases. For example, it covers 8-36 perilous and chronic illnesses. Both help satisfy their purposes. Together they cover all the medical and financial aspects for you as a patient.
   
4. Renewability- At the time when you purchase a critical illness rider with a health insurance plan, the coverage from the rider is for the long tenure of the plan. Further, taking a critical illness cover with a health insurance plan guarantees that you enjoy enormous cover at a moderate premium that a health insurance plan gives. Renewability in critical illness rider with a health insurance plan is either the maximum age renewability or maturity period renewability.
   
5. Policy Premium- Premium is the cost that you pay for purchasing a policy which is to be paid at regular time intervals. In critical illness rider, very little modifications have to be done. It stays as before for the span of the base policy.  In this way, it is relatively on the cheaper side.
   
6. Waiting period- The greater part of the critical illness rider benefit have determined waiting period. There is a waiting time of at least 90 days that is applied from the beginning of risk or the date of recovery of the policy and the rider, whichever is later, to when the sickness is analysed. This implies that the advantage can be availed if the illness is perceived simply following 90 days of purchasing the policy.
   
7. Tax-Benefits- Premium paid under critical illness insurance that too with health insurance is tax-deductible. Critical illness plans offer tax benefits under Section 80D along with health insurance.

EARLY-STAGE CRITICAL ILLNESS vs CRITICAL ILLNESS RIDER.

Early-stage critical illness rider is a sort of health insurance product. The pay-outs are for you to focus on treatments, recovery and getting better. 

• Both ECI rider and CI rider provide lump-sum pay-outs.
• ECI rider covers early, intermediate and major stage whereas CI rider only covers the major stage.
• ECI rider pay-outs are mostly for treatments on the other hand CI rider pay-outs are mostly for financial protection.
• ECI rider doesn’t ensure financial worries during recovery but CI rider offsets your financial risk.

CRITICAL ILLNESS RIDER vs STANDALONE CRITICAL ILLNESS POLICY

Standalone critical illness policy is a separate policy for critical illness, whereas the Critical illness rider is a complementary product with the mainstream insurance policy.

• Both Standalone CI and CI rider alleviates financial burdens.
• Standalone CI provides comprehensive coverage but CI rider coverage is till the duration of basic health insurance policy 
• Standalone CI claims do not affect the other insurance policies that you may hold. CI rider may affect the basic policy.
• Standalone CI does not provide you with the option of budget conscious whereas CI rider lowers the cost option for the budget conscious.

CONCLUSION

Life is like a journey on road, sometimes smooth and sometimes there are speed breakers along the way. Health insurance policy alone is not enough to take care of such financial condition unfortunately and that’s where Critical Illness Rider comes in. Together they cover the hospital as well as non-hospital bills. Thus, strengthening the protection against such speed breakers, at the same time ensuring that your core savings are not impacted.