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A terminal illness is a rapidly advancing and incurable medical condition. When diagnosed with a terminal illness, there is no option but to resort to palliative care because the victim has a lowered life expectancy.

benefits of terminal illness insurance

What is Terminal Illness?

An Overview. A terminal illness is a rapidly advancing and incurable medical condition. When diagnosed with a terminal illness, there is no option but to resort to palliative care because the victim has a lowered life expectancy.

 

What is Terminal Illness Benefit?

You can get benefits from buying terminal illness in term insurance plans available online. Under this, in case the policyholder is diagnosed with a terminal illness, an amount equal to 25% of the sum assured will be paid (subject to a maximum of 100 lakhs).

Once paid, the death benefit will be reduced by an amount equal. In addition, no more premiums are payable after the company accepts the terminal illness claim.

Why should you opt for the Terminal Illness Benefit?

The chances of a person acquiring a terminal illness are slim. However, if diagnosed, the policyholder will require medical care for as long as he is alive. The insured and his family will also require financial support in the months of unemployment that might follow the diagnosis. Further, the insured might need professional counseling to ease the burden of living with uncertainty.

In order to combat such situations, a policyholder should opt for the terminal illness benefit by paying an additional premium. Such a cover can help ease the finances in case of a terminal illness.

What are the criteria to be eligible for Terminal Illness Benefit?

Based on your insurance provider and the product you choose, the conditions for payment of Terminal Illness Benefits can vary. Here are a few indicative criteria:

  • The life expectancy of the insured has to be less than six months
  • The diagnosis has to be made within the policy term
  • Diagnosis has to be affirmed by two medical practitioners (a specialist and a company physician)
  • The Terminal Illness Benefit can be used only for palliative treatment and relief

Are Critical Illness Benefit and Terminal Illness Benefit the same?

No. Critical Illness Benefit is an insurance rider that you can buy along with your policy. It can fund the treatment for critical illnesses, which can in turn aid the policyholder on the road to recovery. However, the illnesses it covers are fixed and specified. It generally covers treatments for heart attack, some types of cancers, stroke, etc.

A Terminal Illness Benefit, on the other hand, is paid on diagnosis of the illness. It can help the family provide palliative treatments to the policyholder.

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How to choose a cover?

While calculating the cover requirements, insurance buyers generally underestimate the costs related to terminal illness. Ensure that the sum insured you opt for covers you against the rising cost of healthcare. Remember that in the eventuality that one is diagnosed with a terminal illness, he will need money for:

  • Palliative care
  • Regular household expenses and EMIs
  • Children’s Education and Lifestyle-related expenses
  • Counseling and related services
  • Replacement of income

Consult a financial planner to learn more about future value of these expenses.

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