When you think of buying life insurance or any life cover, the first plan that is commonly considered is the term plan. For one reason, the term plan is one of the simplest life covers to understand and manage. Plus, the efficiency of the cover ensures that in the event of the policy holder’s death, the family gets the sum assured (the cover amount).
In return, as a policyholder, you will have to pay the premium either regularly or a one-time payment depending upon the type of policy you have purchased. From the premiums paid, a sum of money (death benefit) is paid to the nominee in case of an unfortunate event takes place such as death or accident where there is permanent physical damage. The best part of term insurance is that it also provides an array of options to enhance the protection offered. Some of the term plans also provide critical illness protection as an option to combine with the original plan. Economists and financial experts too, advise that the best way to have a term plan is with a critical illness insurance.
In the following article we will see how it helps to have a term plan with critical illness benefit.
- An income replacement:
If you are diagnosed with a critical illness, there might be a possibility that you will have to extend your leave or emergency expenses may come up. In such a case, the critical illness insurance offers a lump sum benefit. This benefit can act as an income replacement for your family.
- Double tax Benefits:
Combining the term insurance with a critical illness plan can also bring in double tax benefits from both insurances. The premiums that you pay for both the coverages are eligible for tax deduction under Section 80C and 80D. But, the overall limit of tax reduction under both sections may vary for both the insurances. Hence, it is advised to check the limit before you combine the insurances.
- Larger cover:
When you combine the term insurance with a critical illness benefit, it covers both – hospitalization and non-hospitalization expenses. Plus, this way, you can also enjoy the benefit of the much-needed cash flow during the recovery period.
You can also opt to go for a higher health cover since a regular health cover may or may not provide more comprehensive protection.
Critical illness insurance is one of the must-have protection if you want to protect yourself from sudden expenses in the event of medical emergencies. Thus, it is lucrative to have term insurance combined with term insurance.