Why You Should Buy a Critical Illness Rider with a Savings Plan?
A savings plan is a great way to make sure you have money saved up for a rainy day. But what happens if that rainy day results in a life-threatening illness? That’s where a critical illness rider comes in. This insurance policy can help you pay for the costs of treatment and recovery, so you don’t have to worry about finances during a time of crisis.
This blog post will discuss why buying a critical illness rider with your savings plan is important.
Let’s get started.
An Overview of Savings Plan
A savings plan offers a savings component, which allows the policyholder to build up a cash reserve to use for any purpose. With a savings plan, you can also buy a critical illness rider as it protects against the financial risks of critical illnesses. It can pay a lump sum benefit to the policyholder upon diagnosis of a covered critical illness, which can be used to cover treatment costs, replacement of income, or other expenses.
What is a Critical Illness Rider?
A critical illness rider is an effective rider that provides the policyholder with a lump sum benefit in case they are diagnosed with any pre-specified critical illnesses during the policy term. The rider also pays out benefits on the first diagnosis of the illness, irrespective of whether the policyholder continues to live. Common critical illnesses covered under this rider are heart attack, kidney failure, stroke, major organ transplantation, paralysis, etc.
Reasons You Must Buy a Critical Illness Rider with a Savings Plan
You should buy a critical illness rider with a savings plan for several reasons. Here are a few of them:
1. Provides Additional Financial Protection to Your Family
One of the significant reasons to buy a critical illness rider with a savings plan is that it provides additional financial protection to your family. If you are the family’s sole earner, then your family will be completely dependent on your income. In case of any eventuality, they will have no source of income and will struggle to make ends meet. A critical illness rider ensures that your family receives a lump sum amount in case you are diagnosed with a critical illness, which can help them tide over difficult times.
2. Helps You Save Tax
Another reason to buy a critical illness rider with a savings plan is that it helps you save on tax. Under Section 80D, you can avail a deduction of up to ₹25,000 for the premium paid towards a health insurance policy.
This tax deduction is available for policies bought for self, spouse, and dependent children. If you have a critical illness rider added to your health insurance policy, then you can avail an additional deduction of up to ₹5,000 for the premium paid towards the rider.
3. The Rider Pays Out a Lump Sum Benefit
The rider will pay out a lump sum benefit if you are diagnosed with a critical illness. This can be used to cover your medical expenses or any other costs associated with your illness.
The Bottom Line
A critical illness rider is an important part of a savings plan. It can help you cover the costs of treatment and give you peace of mind in the event of a severe illness. If you’re considering buying a savings plan, then be sure to buy a critical illness rider with it.