Insurance query: Supplementing life cover with critical illness rider

I am 32 years old. As a millennial, I have growing concerns about the potential financial implications of critical illnesses. I would like to understand if term insurance can offer coverage for critical illnesses and would like to know how it functions.

Vipul

Term insurance policies serve as a pure protection plan, creating a financial safety net for your loved ones in the event of your unfortunate demise. This coverage ensures financial security for you and your family, enabling you to cover medical bills, seek specialised treatment, manage household expenses, repay debts, and maintain your current lifestyle.

These policies often offer critical illness riders or add-ons, extending coverage to a range of critical illnesses — such as cancer, heart disease, stroke, kidney failure, and more. If you are diagnosed with a critical illness, the policy provides a lump sum payout, reducing the financial burden and allowing you to focus on your recovery. There are some critical illness benefits that also allow for waiver of future premium in case of occurrence of any of the covered critical illnesses. It lets the policy continue as is.

Flexibility is another advantage of term insurance. You can customise your coverage and policy duration based on your financial obligations, future goals, and lifestyle. This flexibility ensures that you have the right level of coverage at different life stages and financial milestones.

Furthermore, term insurance is known for its affordability compared to other types of life insurance. Since the policy focuses solely on providing a death benefit, premiums are typically lower. By opting for a critical illness rider/additional cover, you can enhance your coverage without significantly increasing the premium amount. This makes term insurance a cost-effective solution to protect your financial interests.

To make the most of term insurance and critical illness coverage, follow these tips: Assess your financial needs by evaluating your current and future obligations. Compare policies from reputable insurers, considering coverage, riders, claim settlement ratio, and customer reviews. Thoroughly read the policy document, clarifying any doubts. Regularly review your coverage as life circumstances change, adjusting the sum assured or adding riders as necessary.

In conclusion, Vipul, term insurance with critical illness coverage offers an effective solution to address your concerns about potential financial implications in light of a critical health diagnosis. It provides comprehensive coverage, financial security, flexibility, and affordability. By considering term insurance, you are taking a proactive step towards securing your future and ensuring peace of mind.

The writer is Appointed Actuary, Canara HSBC Life Insurance 

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