Babita Rani Das, Deputy Manager, Bhubaneswar 2, Orissa
Critical illness is a life changing event which hinders our dreams and wipes out savings. Due to the change in lifestyle, the count of critical and life-threatening illnesses are only increasing and inviting the burden of expensive treatment. Affordability towards critical illness treatment from a critical care hospital becomes major concern for many. Critical illness may also result in loss of income, change in life style. If someone is diagnosed with a critical illness, he may become jobless and it directly impacts the family income. The financial hardships due to exorbitant medical costs coupled with loss of income becomes difficult to cope with.
To combat this issue, one needs to plan for a Critical Illness insurance support (rider) to meet the large medical cost as well as a lump sum compensation for meeting day to day expenses without making someone face a financial crunch.
“Critical illness Rider “cover is an additional benefit in which Insurer is contracted to pay a lump sum payment if the policyholder is diagnosed with one of the specific illness on a predetermined list as a part of an insurance policy. While the financial benefit is paid against the Critical Illness rider(11 critical Illnesses covered), the basic policy remains in force even after such a claim payment.
People should consider taking Critical Illness, since they are more likely to suffer a critical illness than die before retirement. Different people will need such a cover for different reasons. If someone is single, he or she might want a policy to ensure her mortgage is paid. If someone is married, the person may want to ensure his or her family is provided for if he or she cannot work due to illness.
Critical illness rider along with a life insurance policy is more beneficial than a standalone Critical Illness Health Plan in many ways;
- It is usually economical and flexible to buy a critical illness rider alongside a life insurance policy. According to the paying capability, one can choose the benefit sum.
- No need to renew the policy separately.
- Policy pays out a tax free lump sum.
- Premium remains same for the entire duration of the base policy and therefore tends to be cheaper than an indemnity plan or a comprehensive health plan.
- In case CI is taken from the same insurer and with term plan, it can be issued within the medical underwriting of term plan.
- The financial burden due to an acute illness will be far more than what an Indemnity health Plan would cover.
So, buying a critical illness Rider alongside life Insurance policy is the best way to get over the shortcoming. In short, CI acts as a hedge against monetary crunch. After the roll out of new breed of Rider benefits, now the “Waiver of Premium” rider not only provides the benefit of waiver of all life insurance future premiums on the earlier occurrence of untimely death or accidental permanent total disability, but also waives of premium on the first diagnosis of a Critical Illness.
The WOP rider is to protect life insurance customers from an unexpected disability or Illness that make it difficult to pay premiums. The benefit against Critical Illness rider is paid on the first diagnosis of any of the predefined 11 critical illnesses. A total disability or a serious illness will inevitably decrease a person’s income, so it is even more difficult to pay premiums of life insurance. When people have a difficult time, they often will terminate their life insurance quickly as a way to make spending cuts. And the effect can be very severe to their families. Disabled people have lower expectancy than average because of medical troubles. Their medical bill puts their family in a tough financial situation. If they pass away without life Insurance, the family can be left without necessary financial support or no retirement income for the spouse. The real benefit of WOP rider is that it preserves a life insurance contract when it is most needed. A WOP rider not only eases the burden of paying life insurance premium but it prevents the life insurance policy from lapsing.
Thus investing in life insurance plan with a combination of CI & WOP riders safeguards an individual from the unexpected financial burdens.
