Understanding the Concept of Terminal Illness Benefits in Term Insurance

The aim behind buying a term insurance policy is to ensure that in the event of untimely death, the family is not left strangled for financial help. Having a substantial term insurance policy ensures that the grieving family has enough time to mourn the loss of a loved one while standing back on their feet.

The catastrophe compounds even further if the person deceased was suffering from a terminal illness, leaving behind a family, which is not only exhausted physically and emotionally but also financially given the expensive treatment.

Terminal Illnesses And Term Insurance

Getting A Terminal Illness Benefit Or Rider

A terminal illness benefit or rider is an add-on benefit that can be added to the base term insurance policy by paying a small amount in addition to the standard policy premium. When purchasing the policy, policyholders can request their insurance provider to add a terminal illness benefit or rider. The insurance company will provide the policyholder with relevant forms to fill out along with the base policy. Once the payment is made, the policyholder is covered under the terminal illness benefits.

When Then Terminal Illness Strikes

As terminal illness rider protects the policyholder against expenditures related to medical treatment, they have the right to file for the assured sum right after their diagnosis. The policyholder receives a lump sum payment of the assured amount, which can be used to pay medical bills, hospital fees, doctors' costs, or any other way deemed fit. However, it is to be noted that upon the advance payment of the assured amount, the policy will thereby stand fulfilled and terminated from any further claims.

Frequently Asked Questions

What are some common terminal illnesses covered under term Insurance?

Depending on the insurance company's terms and conditions and particular case and policy, a term life insurance policy with a terminal illness rider covers several conditions, including:

• Myocardial infarction
• Cancer
• Kidney failure
• Chronic liver disease
• Chronic Obstructive Pulmonary Disease
• Brain tumour
• Organ transplantation
• Heart valve surgery
• Major head trauma
• Primary pulmonary hypertension
• Angioplasty
• Aplastic anemia
• Motor neuron disease
• Multiple sclerosis
• Paralysis
• Alzheimer's disease
• Cardiomyopathy

Is there a difference between critical illness and terminal illness?

Yes, there is a difference between critical illness and terminal illness. Critical illness is an illness that, while serious, can be treated and cured with proper medical treatment and care. However, a terminal illness, while it can be managed with medical treatment and care, cannot be cured and will eventually lead to the person's death. Therefore, insurance companies provide different covers for critical illness and terminal illness.

Can your claim get rejected even after terminal illness benefits or riders are added at purchase?

Policyholders must diligently communicate with the insurance company about any substantial medical condition like terminal illness. It also includes making follow-up communication in the event of any changes in the conditions of the disease. Suppose the policyholder omits to notify the insurance company about any subsequent change in their condition. In that case, their claim can get rejected even after terminal illness benefits or riders are added at purchase.