Why Critical Illness Cover is Important in a Term Insurance Plan?

Sometimes, life can be ungrateful. For instance, when you suddenly become ill, it can be difficult to pay for the medical expenses. This worry doubles up if you end up developing a major disease. It causes stress not just for you, but also for your family. Moreover, it can lead to a financial burden on the family, which just increases stress more than before. The worst situation to be in is that you being the sole breadwinner of the family go through a medical emergency. In this situation, not only are they unable to cover the cost of treatment, but they also have to dig into their savings to cover the loss of income.

Term insurance or an online term plan is a great way to safeguard yourself from critical illnesses. It provides a benefit that can be used to pay for medical bills. It also comes with various coverage options. This way, you can truly get the most out of the policy. However, term insurance being a type of life insurance leaves many people confused about how it can help with critical illness. Here’s the answer.

Term insurance

The goal of a critical illness policy is to cover the expenses associated with availing medical services. Since the base function of term insurance is to give your family a payout after your death, it is understandable why you would be confused about the correlation between term insurance and critical illness coverage.

Term insurance is a type of insurance policy that provides a secure sum assured to the family when the policyholder dies. It is usually very cheap to buy and has high coverage. Term insurance plans require the policyholder to pay a certain amount as premium every year. The beneficiary of this policy is also known as a nominee. It is the nominee that receives the death benefit if the policyholder dies during the term of the policy. However, many insurance companies and policies have a lot of added benefits that a policyholder can avail. One such benefit is through term insurance riders. The critical illness rider provides the benefit of receiving cash payouts when diagnosed with a major illness like cancer, or heart attack or organ failure.

Critical illness coverage in term plans

Terms plans that offer a critical illness benefit provide a lump sum amount to recognise the various illnesses that are included in the policy. This may include heart attack, cancer, paralysis, heart failure, lung diseases, end-stage lung disease, third-degree burns, end-stage liver disease, major head trauma, loss of limbs, benign brain tumor, and many others depending on the insurance provider. The payout given in this scenario can be used for treatment of these illnesses. Some of the procedures that can be performed include major surgery, heart valve repair, open-chest surgery, etc.

Getting treated for critical illnesses usually means that patients have to visit the hospital several times. This can add up to a high cost for the treatment. A term insurance policy with critical illness benefit can cover both hospitalisation and non- hospitalisation expenses. You can talk to your insurance provider about covering critical illnesses in your plan.

How can you use your critical illness coverage?

A term insurance with critical illness rider provides a lump sum amount to be used to cover the high expenses associated with a serious illness. This plan is something you should have even if you have health insurance already.  A critical illness plan can be bought as a standalone policy, but it is better to have it clubbed with a term insurance plan. Regardless of whether it’s standalone or within a term plan, the terms and conditions of the coverage remain the same.

Due to the increasing cost of healthcare in India, it is more important than ever to have an adequate insurance policy in order to safeguard your financial future. A term plan with critical illness coverage will help immensely in covering all of the medical expenses that you might face during an illness.


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