What next after term insurance

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There are two types of critical illness riders on offer. First is the standalone rider, which pays if the life assured is diagnosed with a critical illness it covers. The sum assured is paid and the basic life insurance cover continues. The second is accelerated critical illness benefit rider. Upon diagnosis of a critical illness covered, the life insured is paid the death benefit available under the policy and the policy ends.

"The premium for a standalone critical illness rider is higher than the premium payable for accelerated critical illness rider. , The underwriting requirement for standalone critical illness rider is also higher," says Rituraj Bhattacharjee, head- product development, Bajaj Allianz Life Insurance Company.

Individuals with family history of a critical illness should ensure that they buy adequate critical illness cover at an early age.

Critical illness cover is also available as a standalone product with general insurance companies. One can compare the critical illnesses covered under the rider and general insurance products before deciding on one. The premium payable towards critical illness rider under a traditional term life insurance policy remains the same throughout the term. But, in case you buy a general insurance policy covering critical illness, the premium rises with age.

Sure, these so-called pure risk covers won't bring you anything in return. But they offer you something more invaluable: peace of mind. Even if you have to face an unfortunate situation in life, you will not have hit the pause button. There will be no need to rush to break fixed deposits, liquidate investment or seek help from friends to fund the expenses to take care of the situation. All you have to do is to get well soon and restart your life in full steam.

It is better to buy an accident disability rider along with the life insurance policy due to the ease of purchase. But since, in life insurance, the sum assured for the accident disability rider is capped much below the sum assured offered for life cover, it is better to buy a general insurance policy also to enhance the cover.

Health cover

Like accidents, hospitalisation also takes a toll on an individual's financial health. This is where health insurance policies come to your rescue. "You should always have a medical insurance policy that promises to reimburse your actual expenses, as a core holding of your insurance portfolio," says Rahul Aggarwal.

You may opt for a family floater option to extend cover to the entire family. Additionally, you can buy a hospitalisation cash policy.

"Hospitalisation cash policy offers a fixed daily benefit to the insured individual upon hospitalisation, which can be utilised to pay for miscellaneous expenses not covered by the health insurance policy," says TA Ramalingam, head-underwriting, Bajaj Allianz General Insurance Company.

"The policy that reimburses actual expenses will pay for the admissible expenditure you incur in a hospital," says Pankaj Mathpal, a certified financial planner with Optima Money Managers.

If you still want to ensure more cover, you can add high deductible health insurance policy to your portfolio. This policy reimburses actual expenses incurred on hospitalisation and treatment above a pre-determined level. This can also help one save a lot in terms of premium. For example, instead of buying a 10-lakh medical policy, buy a 3-lakh policy and then a 7-lakh high-deductible policy, which pays for expenses over and above 3 lakh. Both put together offer a good solution for most medical insurance needs.

Critical illness

Despite all these precautions, the advent of a critical illness can still wipe out your savings and force you to hunt for more funds for treatment. So check out the critical illness rider available with many term insurance products of life insurance companies.

There are two types of critical illness riders on offer. First is the standalone rider, which pays if the life assured is diagnosed with a critical illness it covers. The sum assured is paid and the basic life insurance cover continues. The second is accelerated critical illness benefit rider. Upon diagnosis of a critical illness covered, the life insured is paid the death benefit available under the policy and the policy ends.

"The premium for a standalone critical illness rider is higher than the premium payable for accelerated critical illness rider. , The underwriting requirement for standalone critical illness rider is also higher," says Rituraj Bhattacharjee, head- product development, Bajaj Allianz Life Insurance Company.

Individuals with family history of a critical illness should ensure that they buy adequate critical illness cover at an early age.

Critical illness cover is also available as a standalone product with general insurance companies. One can compare the critical illnesses covered under the rider and general insurance products before deciding on one. The premium payable towards critical illness rider under a traditional term life insurance policy remains the same throughout the term. But, in case you buy a general insurance policy covering critical illness, the premium rises with age.

Sure, these so-called pure risk covers won't bring you anything in return. But they offer you something more invaluable: peace of mind. Even if you have to face an unfortunate situation in life, you will not have hit the pause button. There will be no need to rush to break fixed deposits, liquidate investment or seek help from friends to fund the expenses to take care of the situation. All you have to do is to get well soon and restart your life in full steam.

Source: Economic Times

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