Critical Illness Riders - Useful Or Taking You For A Rideš“?
Weāve heard a lot of questions around critical illness riders in health insurance or term insurance policies - if it is really worth buying and what the alternative options (if any) are.
We thought we should settle this question - once and for all! So, here we go!
Why do you need a Critical Illness cover?
A critical illness - a serious disease or medical condition can cause serious financial damage to your family, possibly - even worse than death. Even if you have a good health insurance policy to cover all your hospitalization expenses, you will end up spending out of your pocket for major expenses such as renovating your house to make it suitable for your use, redoing your car, etc. Plus, youāre likely to incur several long-term expenses towards medical bills, doctor visits, and hiring of nurses/ household help.
All this, while your source of income is either lost or substantially reduced. Weāve known senior leaders from huge multinational companies giving up their high-paying jobs, and taking up less stressful roles - after suffering from a stroke or a heart attack. In other cases, weāve heard of individuals who had to discontinue working - temporarily and permanently as a result of getting cancer - with long-term chemotherapy needing several months of treatment to work.
If your family largely depends on your earnings for their expenses - you should seriously consider a critical illness cover that will provide your family with the financial relief to deal with a serious disease and the costs that follow, without compromising on their current lifestyle.
2 ways to get a Critical Illness Cover
You can get a critical illness cover in one of two ways.
- As a Rider - as discussed above, as an add on attachment rider over your term insurance plan. For an additional cost and no extra paperwork - you will be able to take this critical illness cover.
- Separate specialized policy - as a separate critical illness insurance policy. Such policies are designed for a specific purpose and are therefore comprehensive covers. They can, however, get expensive (especially after you grow older or get a disease) and a high coverage may require mandatory medical tests.
Hereās a quick comparison of a critical illness rider and a Separate specialized policy - to help you make a decision.
| Critical Illness Rider | Separate specialised policy | |
|---|---|---|
| Type of policy | This is an add-on, on a base term insurance, health insurance or life insurance plan. | This is a separate comprehensive policy |
| Limits on Cover amount | The coverage amount you can buy is limited to your base cover. | Thereās no limit, so you can buy any amount of cover |
| What stages of Critical Illness are covered? | Cover only advanced or final stages | Separate plans may cover early stage critical illness too. |
| How complicated is the buying process? | Part of the main plan, hence no separate paperwork or medical tests required | You will go through all due diligence - including documentation and medical tests wherever necessary. |
| Premiums | Initial premiums could be similar to standalone riders. However, premiums usually remain fixed for a long duration or the entire term based on the plan. | Premiums change as your age changes. It can become very expensive in old age. |
Learn about critical illness insurance in detail, in our recently launched eBook - The Most Definitive Guide To Critical Illness Insurance. Download your free copy here.
How to decide which one is right for you?
If youāve to make a decision about buying the right critical illness cover for yourself, hereās how you should compare your two options.
- If convenience and cost is a priority: If youāre looking to buy the policy without too much effort, or at a relatively lower cost - choose a critical illness rider, along with your term insurance policy.
- If you want to provide adequate cover for your family: If youāre someone who doesnāt want to compromise on the quality of cover, and are willing to pay the additional costs - you should pick a Separate specialised policy. This will also mean youāll spend time being diligent about all the features and benefits, and fill additional documentation for the plan. But, itāll be worth it as your family will get a very dependable cover.
We hope this article has clarified at least some of the questions youāve got about the critical illness insurance plans - riders and comprehensive covers.
Comparing Term Insurance Plans on the basis of Critical Illness Riders
If youāre planning to buy term insurance with a critical illness cover as a rider, you must be very careful about the ātypeā of rider you pick. Some insurers exclusively offer comprehensive riders while some, accelerated ones. And there was no way to compare term insurance plans based on critical illness riders before. But, now - things have changed!
We bring you BeshakāRatings, the first-ever unbiased and data-backed solution for insurance comparison, where you can objectively compare term insurance product features - including critical illness riders, and make an informed purchase decision. BeshakāRatings is accessible for free, for all our community members.
So, if you are looking to find the best term insurance plan for your family - check out BeshakāRatings right away.
If you have any specific questions and would like to understand the right insurance plan for you, post them on the Beshak Forum, and get answers from experts for free!
- š§āš¼ Every earning member of the family should buy a critical illness insurance and protect their loved ones from the financial risk of a serious disease.
- In the case that you get a serious disease š listed in the policy, your family will be paid a lump-sum amount of money.
- You can buy this cover either as a Rider with your term insurance policy, or as a separate health insurance cover specialised for critical illnesses. š¤
- You should be aware of the many differences between both these covers š”ļø, and carefully analyse them before finalising which policy to buy.
We are a group of young members of the Beshak community. We come together to brainstorm, write relevant and useful content for people (just like us) who want to figure insurance on their own. If you too want to share inputs/write for us - send us a "hey" to info@beshak.org
Hi Team Beshak for all the write ups. 1. Considering the article above, could you pl elaborate about Stand alone critical illness policies issued by Life Insurance companies. 2. Is it fine to conclude that ( overall benefits ) critical illness insurance policies offered by Life insurance companies >> Non life insurance companies. 3. I have a term plan with out any riders, cannot add one now since the premium payment type is Limited period. Would like to opt a stand alone policy . Could you suggest / advice on Future Generali heart and health plan , Canara HSBC Health first plan and Edelweiss Criticare plus. Thanks in advance.
Hello Suba Kumaran, 1. We can't make a generic comparison around standalone critical illness policies from Life or General insurance. Both have a similar product construct and hence the policies are comparable - none are superior to the other. 2. Yes, it is recommended you go for a standalone policy in your scenario. 3. We do not currently recommend Critical Illness plans. Apart from the above, we invite you to check the Critical Illness eBook we recently launched - It may answer many of your questions before you buy the policy: https://www.beshak.org/health-insurance/e-book/best-strategies-to-buy-critical-illness-insurance-policy/
** Thanks **
Hello readers, It is very important to take critical illness policy.I have one friend who was diagnosed with colon cancer and critical illness policy saved him.Thanks beshak team for such ethical articals.
What about the critical illness or cancer policies issued by Life Ins Co's? Are there plans comparable with General Ins Co's?
Hello Hiren
We have covered the critical illness plans offered by Life as well as general under Specialised standalone plans above.
We have not covered cancer plans here. While we understand that Cancer can result in major financial disruption, when we take a few steps back we feel it does not make sense to take a single disease plan, when you can take a similar one-time effort and get hold of a comprehensive plan that covers a wide range of diseases.
Yes, the plans from General and Life insurance are comparable if both of them are fixed cash benefit plans and not reimbursement plans based on actual expenses.