Critical illness rider: A must for Indians

A critical illness rider is an optional add-on feature that can be bought to compliment the life insurance policy.

Critical illness rider: A must for Indians

Avail a crucial additional cover for a nominal additional premium.

The recent Global Burden of Disease (GBD) studies show that cardiovascular diseases are the leading cause of deaths in India. These diseases include ischemic heart disease, Chronic Obstructive Pulmonary Disease (COPD) and stroke.

Treatment for all of these critical illnesses is very expensive. While basic health insurance policies do cover these illnesses, thesum assured they offer is highly inadequate. For example, most health insurance policies offer a sum assured of 2 to 5 lakhs (family floater), while the treatment for ischemic stroke itself amounts to 6 lakhs. Here, traditional life insurance policies are also of little help because they grant the sum assured upon the demise of the insured.

This is where the critical illness rider is useful.

Related: Life Insurance 101- Everything you want to know about life insurance 

What is a Critical Illness Rider?

A critical illness rider is an optional add-on feature that can be bought to compliment the life insurance policy. It ensures that a lump sum (Sum Assured) is paid to the policyholder if he or she is diagnosed with any of the critical illnesses specified -inthe policy. Once the payout is made, the rider terminates while the life cover under the Base Plan and other riders (if any) continue.

What are the illnesses covered under the Critical Illness Rider?

Each insurance company covers a different array of illnesses under this rider. However, the critical illness rider typically covers:

  • Cancer
  • Open Chest CABG
  • First Heart Attack
  • Stroke

Some companies also offer special Women Critical Illness riders.

Related: 5 Things you must know before you buy life insurance 

What are the conditions of the Critical Illness Rider?

Although the critical illness rider covers the specified illnesses completely, there are a few scenarios where claims are rejected. Generally:

  • The rider does not cover pre-existing or hereditary conditions
  • Claims can be made only if the illness is diagnosed after the waiting period
  • Claim is paid only if the insured survives a specified time frame after diagnosis of illness

Related: Here's why your life insurance is expected to get cheaper and health cover dearer

What are the types of critical illness riders available?

  • Core/ Non-Accelerated Critical Illness Benefit
    Here, the sum assured under the critical illness cover is independent of the death benefit. The benefit paid by the rider does not affect the death benefit of the life insurance policy.
  • Accelerated Critical Illness Benefit
    Under this kind of critical illness rider, the benefits paid can reduce the death benefit of the base policy.

Also see: Add an extra feature to your policy by opting for a ‘Rider’


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