Critical Illness Insurance vs Critical Illness Rider: Which One To Choose?
Insurance policies were designed to help us secure our future. To ensure we protect our loved ones and ourselves from the unpredictability of life, many insurers have launched different insurance policies. For instance, term insurance offers pure life cover at affordable rates. Alternatively, the life insurance savings plan will help you protect your loved ones and build for your future simultaneously.
Like the savings-investment plan, insurance policies have made provisions to help you deal with unexpected critical illnesses and the resultant medical expenditure. You can either opt for a standalone critical illness policy or an add-on critical illness rider with your life insurance plan. However, if you’re confused between the two, it would help to learn about them individually first.
What is Critical Illness Insurance?
Critical illness insurance is a standalone insurance plan that offers comprehensive coverage primarily for critical illnesses. The policy covers long-term and serious diseases like stroke, cancer, paralysis, kidney failure, heart diseases, organ transplant, etc. The illnesses covered may differ for different insurers.
Getting medical insurance for these diseases can be quite a massive expenditure. Therefore, with a critical illness cover, you will get financial assistance dealing with such medical emergencies. The policy will help you get access to adequate healthcare services. With a critical illness insurance policy, you can invest your energy in recuperating from the illness instead of worrying about the medical bills.
A critical illness insurance plan in India will include hospitalization costs, doctor consultation fees, medicine costs, etc. Along with this, if you’re the sole earner of the family, the insurance plan will help you deal with any outstanding debts or liabilities you hold.
What is a Critical Illness Rider?
A critical illness rider is an optional rider that you can include in your life insurance policy as an additional enhancement to the policy. The rider ensures that you get a lump sum if you get diagnosed with a critical illness specified in the policy.
A critical illness rider offers coverage against major terminal and chronic diseases. The list of critical illnesses covered is provided by the insurance company. For instance, Tata AIA covers almost 35 critical illnesses with the critical illness rider available with the Tata AIA life insurance policies.
You can rely on the rider as soon as you are diagnosed with a critical illness. Through the critical illness rider, you get the freedom to use the payout from the insurance plan as per your requirement.
Difference Between Critical Illness Insurance and Critical Illness Rider
While they may have certain similar advantages, there are several differences between the two. Listed below are the differences between critical illness insurance and critical illness rider:
- Coverage: A critical illness plan offers comprehensive coverage. However, the coverage from a critical illness rider will depend on the base policy chosen.
- Sum assured: Critical illness policies offer flexibility on the sum insured offered. However, in critical illness riders, the coverage cannot go above the base policy.
- Medical test: Critical illness policies need a medical test. However, with a critical illness rider, you do not need to appear for a medical test.
- Renewal of policy: The critical illness policy has to be renewed every five years. Whereas your rider is renewed with your annual life insurance renewal.
- Premium: The premium for a critical illness policy will change based on your age and health condition. However, with a critical illness rider, your premium amount stays the same.
- Waiting period: There is usually a 30 to 90 days waiting period with a critical illness policy. However, the critical illness rider will provide you with protection from the purchase day.
Therefore, both options offer their own set of benefits and features. However, if you’re planning to select one out of the two, you must decide after considering your health condition and requirement.
For example, if your sole reason for purchasing the insurance plan is to get coverage for critical illnesses, then opting for the critical illness policy will be optimal. The higher coverage offered through the critical illness policy will be optimal for treating a critical illness.
However, if you are okay with lower coverage for critical illness at an affordable cost, opting for the critical rider with your insurance plan will be suitable.
Thus, if you’re looking for critical illness coverage in India, you can either opt for a critical illness insurance plan or a critical illness rider with your life insurance policy. A critical illness policy can be quite optimal if you’re only looking for coverage to deal with a critical illness. On the other hand, relying on the critical illness rider may be optimal if you wish to get basic coverage to deal with a critical illness.