Which health issues are covered under Term Insurance?

Life is filled with unpredictability, which is the reason it is fascinating. It is impossible to predict the future, but safeguarding the financial future of those dependent on us is a wise decision. A term insurance policy is the most effective option to protect the financial future of your family members after your death. But while you are alive, term plan riders provide additional coverage for your life and guard you against certain specific circumstances. Critical illness rider is one of these important add-ons that offer a substantial sum assured in the event of the policyholder getting diagnosed with any serious health illness.

Vinayak Patel works as the marketing head of an FMCG company that involves extensive travel. Considering his job profile, he had purchased a term insurance policy for 2 crores around 5 years back, so he could protect his family from any financial uncertainty after his demise. Being a diabetic, he was taking regular medication on the advice of a doctor and was also on a strict diet to keep diabetes under control. But one fine day, he collapsed in the office while attending a meeting. On getting admitted to the hospital, it was found that he had suffered a heart attack and had to undergo heart surgery immediately. Since Vinayak had taken a critical illness rider along with his term plan, the operation cost and hospitalization expenses were handled with the rider sum assured. If not for the rider, he would have spent lakhs of rupees from his pocket for the treatment.

Does Term Insurance cover health issues?

Term insurance plans are known to provide coverage against your life but they also protect you financially if a health complication arises. Here are the most common health ailments where the term insurance coverage can be extended with Critical Illness riders:-

• Diabetes: A very common lifestyle illness of the current times, diabetes is becoming more prevalent because of our changing food habits and decreased physical activity. The critical illness rider with the term plan will assist in bearing the cost of fighting diabetes by covering the cost of medicines and doctor’s appointments or surgeries if required.
• Heart Condition: Because of our hectic lives, an increasing amount of people are suffering from various heart-related conditions. It includes high blood pressure and coronary artery disease which in extreme cases could cause heart attacks. If you choose to purchase a Critical Illness policy the term insurance will assist in covering the cost of surgeries, medications as well as cardiac rehabilitation.
• Kidney-related diseases: One of the most frequent health problems, especially among the elderly population is kidney-related diseases. A term insurance policy with critical Illness riders greatly helps in taking care of the financial burden of treating kidney-related diseases such as kidney stones, renal failure, etc.
• Lung ailments: Certain unhealthy habits like smoking cigarettes, polluted environment, improper breathing, etc., harm the respiratory system, specifically the lungs. But, because of pollution even non-smokers develop ailments like asthma and chronic obstructive lung disease (COPD). With Critical Illness Riders, your term insurance policy can also provide very good coverage for the treatment cost of such lung ailments.
• Cancer Insurance: Your term policy coupled with a medical rider, such as Critical Illness Benefit or terminal illness benefit, will also pay for treatments for a serious disease such as cancer, by paying for appropriate medical treatments or surgeries, as well as various treatments.

Types of death covered in term insurance

Before you buy term insurance, it is always best to know the inclusions and exclusions of term plans. Therefore, here is the list of deaths that are covered by the term insurance plans.

• Natural death: If the policyholder dies naturally or because of any health issue, medical condition, or illness within the term of the policy and if they are insured by term insurance plans, then the insurance company will provide the sum assured to the person who is named as the nominee as a death benefit.
• Accidental Death: Term insurance plans provide coverage for deaths caused by accidents or deaths in hospitals due to an accident. There are also accident death benefit riders that could be added to an existing term plan, which provide an additional sum assured, and in the event of the death of an insured due to an accident, the additional death benefit can be claimed from the insurer.
• Pre-existing health issues: In the event of the insured person’s death as a result of any pre-existing condition and the health condition was informed in the application form at the time of buying the term insurance policy, the death benefits are paid to the nominee of the policyholder. However, if the pre-existing condition was not disclosed at the time of purchase, then the claim is rejected.
• Suicide Death: The death of the policyholder as a result of suicide after one year from the beginning of policy can allow the beneficiary to receive 80 percent of the total premiums paid in case of a non-linked policy or 100%, in the event of linked plans. If the policyholder decides to commit suicide within one year of the term, the claim could be denied.

Certain deaths are excluded from the purview of a term insurance policy and if a claim request is sent, it shall get rejected by the insurance company. They are:

• Death due to calamities:  The death of a policyholder due to an event of natural calamities like floods, earthquakes, and cyclones. Tsunamis etc. are not covered by term insurance plans.
• Death due to HIV/AIDS: If the death of a policyholder is caused due to HIV/ AIDS or any other STDs (Sexually transmitted diseases) during the policy period, they are not covered by a term insurance policy.
• Death caused by self-inflicted injuries: Term plans do not provide coverage for any death that occurs to a policyholder who is engaged in an activity that is considered to be an adventure or other hazardous activity, such as cycling or car racing, bungee jumps, paragliding, or river rafting, hiking, etc.
• Death as a result of addiction or substance abuse: The death of an insured person because of alcohol dependence or overdose of a drug or the consumption of prohibited narcotics is not covered by the insurance policy and could cause a claim to be rejected from the insurer.
• Death due to Homicide: If the policyholder was involved in a criminal act that caused his or her death, the claim will not be made to the insurer.

Buying term insurance with a critical illness rider not only saves you from buying another health policy as the rider protects you from bearing the huge hospital costs if diagnosed with any critical illnesses. Nowadays, when you buy term insurance online, it is possible to choose your desired rider along with the term plan, saving you time, money, and effort.