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A Critical Illness Rider Vs A Standalone Critical Illness Plan

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Thu, 02/12/2015 - 17:23


Health Insurance

When choosing a health insurance, it is imperative we consider the factor of critical illnesses (a life threatening disease or medical condition). Apart from the mental agony and physical pain, sudden incidence of an illness can lead to massive expenses that can financially cripple your family. A critical ailment is therefore capable of adversely impacting your future plans and those of your family by eating into your life savings.

Further it must be noted that there are certain medical conditions that are life threatening and can impact the fittest and most health conscious of persons. 3rd degree burns, bacterial meningitis that causes brain fever, Hepatitis can severely impact health of even the healthy.

Therefore while having health insurance is definitely a must, what is more important is that the insurance one opts for actually provides adequate support in wake of a dire medical emergency. For instance more often than not the fixed amount pertaining to one’s insurance is too low to meet basic expenses involved in case of a critical illness.

So much so that even a small percentage of doctor’s fees and cost of medicines may exceed the amount. The amount may not even be considered for specific expenses such as on intensive care unit or prosthetics among other treatment requirements. In such cases, you have the patient is left with no other options but to foot the bill his/her own pocket.

Buying a critical illness plan is the best way to overcome such restrictions. This kind of cover has emerged from the comprehension that people who survive any life-threatening conditions face financial difficulties. Critical illness cover acts as a hedge in such a situation.

You either can buy a critical illness plan as a standalone policy, or combine critical illness riders with your existing life or health insurance plans. The policy terms and conditions under both these available options are more or less the same. The choice between a standalone policy and a rider depends on one’s requisites.

Usually, a standalone policy offers more flexibility in choosing the sum insured and larger covers as compared to riders. Also, the limit on sum insured for a rider is usually the same as the base policy. There is also a difference in pricing of these policies. A standalone critical illness policy generally comes at a higher cost as it has the option of choosing a higher sum insured.

Let's look at some of the basic differences between the two types of critical illness coverage

1. The Amount of coverage

A standalone policy provides more flexibility to decide the sum insured. However, critical illness rider, cannot exceed the coverage amount of the base policy. Hence, a standalone policy is a better option for people who require a higher amount of coverage.

2. Renewal of Policy

The critical illness rider enjoys a longer tenure, but a standalone policy has to be renewed every five years. However, termination of the health policy to which the critical illness rider is added discontinues the critical illness coverage.

3. Policy Premiums

As the standalone policies are renewed every five years, the premiums for the same also change as per the age and health conditions of the policyholder. However, the premium on a critical illness rider remains unchanged for the duration of the base policy, so they are to be likely to be cheaper.

4. Coverage

Standalone policy provides more coverage for critical ailments than any critical illness rider does.

So, are you still trying to decide which one to opt for? A standalone policy or a rider? The answer actually depends on your health background and your specific needs.

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Bharti AXA General Insurance Company Ltd is a joint venture between Bharti Enterprises, a leading Indian business group and AXA, a world leader in financial protection.

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