Benefits of Buying Term Insurance with a Critical Illness Cover Rider 1

Benefits of Buying Term Insurance with a Critical Illness Cover Rider

Insurance plans offer policyholders a pure risk cover against death by paying the beneficiary a lump sum amount. But what if we told you that your coverage could also be extended to include other perils? This can be done by combining your term insurance with rider benefits, available at a nominal rate. You can maximize protection and make the most of your policy by getting such add-on covers. The riders can be bought when purchasing your term insurance plan. So, it’s time to learn more about the critical illness rider available with term plans and some of its key benefits.

What Is Critical Illness Rider in Term Insurance?

Term insurance policies allow you to extend your coverage by adding riders to the plan. These riders are additional components that you can purchase for more protection against certain risks. A critical illness rider is one popular option that most policyholders add to their term plans. Though you may not suffer from any ailments right now, the chances of getting diagnosed with an illness are higher as you age. Such major diseases aren’t covered under the insurance policy.

So, you can ensure that your loved ones are secured and have a financial backup with a critical illness rider. Compared to the cost-effective price of purchasing an add-on cover, the rider benefit is much more as it safeguards your family. Some common critical illnesses covered are cancer, Parkinson’s disease, paralysis, Alzheimer’s disease, heart attack, heart failure, kidney failure, etc. You can use the term insurance plan calculator available online to compare the premiums offered by various insurers.

Benefits of Opting for Term Insurance with Critical Illness Rider

Here are some key benefits of purchasing a critical illness rider with your term insurance plan:

1. Financial Aid

With the increasing healthcare costs, paying for treating a critical illness can burn through your savings. However, adding rider benefits to your insurance plan allows you to receive a lump sum payout. This amount can get you the best treatment and help you recover without affecting your finances.

2. Coverage from major ailments

Though the list of critical illnesses covered under the rider may vary from one insurer to another, you get protection from numerous ailments. Most of these are major diseases requiring the best medical care and are very commonly diagnosed nowadays. The rider also covers some key ailments such as open-chest CABG, permanent paralysis of limbs, stroke, open-heart replacement or repair of heart valves, angioplasty, etc.

3. Tax Benefits

You can claim the premiums paid towards your term insurance plan under Section 80C of the Income Tax Act, 1961. The premium with the inclusion of the rider can be claimed up to a limit of INR 1.5 Lakh per financial year. Thus, you can easily save on taxes with the term insurance tax benefits.

4. Easier to manage

Adding a rider for similar coverage can go a long way compared to buying a separate critical illness insurance plan. As it’s an add-on cover that works with your base plan, it is much more hassle-free. However, an extra insurance policy has to be maintained along with the increased premium rates.

With this, you must have understood the lucrative benefits of getting critical illness coverage. Thus, you can reap the benefits of maximum coverage with the rider by paying a nominal price. Use a term insurance calculator to determine how much you would have to pay to receive coverage. Though many individuals opt for an insurance policy due to term insurance tax benefits, it is advised to avoid viewing it as a tax-saving instrument. Similar to a critical illness rider, term insurance offers numerous such features.


I am a writer, financial consultant, husband, father, and avid surfer. I am also a long-time entrepreneur, investor, and trader. For almost two decades, I have worked in the financial sector, and now I focus on making money through investing in stock trading.