Reasons Why Term Plans Need a Critical Illness Cover

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Reasons Why Term Plans Need a Critical Illness Cover

Term plans are among the most widely used and reasonably priced types of life insurance that offer your family financial security in the event of your untimely death. However, serious illnesses diseases that pose a threat to life and necessitate costly, drawn-out treatment—are not covered by term plans. Anybody can be affected by critical illnesses, which can have a terrible effect on your physical, mental, and financial well-being, regardless of your age, gender, or lifestyle. For this reason, it is best to choose critical illness insurance in addition to your term plan. This will enable you to receive a lump sum payment if you are diagnosed with any of the listed critical illnesses.

Here are Some of the Reasons Why Term Plans need a Critical illness Cover:

  1. To Compensate for The Loss of Income

You might not be able to return to work and collect your usual salary if you are diagnosed with a critical disease. Especially if you are the family’s only provider, this could put a significant financial strain on you. You may be able to replace lost income and satisfy other financial responsibilities, such as loan repayments, children’s schooling costs, and home bills, by receiving a lump sum payout from a critical illness insurance policy.

  1. To Cover the High Medical Costs

Critical illness treatment is often quite expensive and may not be covered by your standard health insurance plan. The cost of hospital stays, surgeries, medications, diagnostic tests, and post-hospital care might amount to lakhs of rupees, which you may have to pay for. You won’t need to take out loans from friends or family or deplete your funds to afford these medical costs if you have critical sickness coverage.

3. Focus On Recovery

You can devote all of your energy to getting better when you are not concerned about paying for your medical care or losing your job. You can work towards being physically stronger without worrying about financial obligations hanging over your head. You can receive the greatest care necessary, including physiotherapy or rehabilitation programs that aid in your recuperation. When people are unable to pay for their medical bills, they are compelled to borrow money or incur debt. People frequently have to stop receiving treatment completely because they cannot afford it. If you choose to add critical illness insurance to your term plan, you can steer clear of these situations.

4. The Premium Stays the Same

The amount of the insurance premium you pay will not change if you choose to use your term plan’s critical illness cover feature. Your premium will not go up if you receive a critical illness diagnosis during the term of the coverage because this has already been taken into account when calculating your premium.

5. Tax Concessions of The Critical Illness Cover

You also receive extra tax advantages when you combine your term plan with critical illness insurance. Section 80D of the Income Tax Statute, 1961 exempts critical illness coverage, however, Section 80C of the statute covers the term plan. Section 10(10D) exempts the proceeds from certain components of your term insurance. Tax savings are advantageous to you on two fronts.

Acquiring critical illness coverage in addition to your term insurance policy has many more advantages. However, before you sign up for it, you must carefully read over the policy’s terms and conditions. Make sure the primary common ailments are covered by starting with the list of important illnesses covered by the policy. Verify that the coverage covers critical illnesses if you have a family history of any of them. The average cost of medical care in your area for the more serious ailments, including hospital stays, should be known to you. You can determine the appropriate amount of coverage you require in a term policy by taking inflation into account as well.