A Critical Illness Rider Vs Standalone Critical Illness Plan

Who doesn’t want to be spoilt for choices? Be it attire, food, automobiles, holidays or fun, we all want infinite choices and tend to choose the best!

However, when it comes to health plans, too many options can become a bit tricky. Of course, the various options give you a plethora to choose from, but the tricky part is there due to the technical nature of the product. Not everyone is well-versed with the insurance terminology, and sometimes it becomes tough to get your way out of a technical maze.

Worry not! We are here to help you make the right decision by explaining the difference between critical illness rider and standalone critical illness plan. Before we begin, let us make it clear that critical illnesses are those diseases that are life-threatening and generally require gigantic expenses for their medical care, treatment, and management. These include diseases like cancer, bypass surgery, kidney ailments and the likes. Since these critical illnesses require special attention, health insurance companies offer you the option to either add them in your current health or life insurance plan or buy a completely separate critical illness plan.

Ideally, it would depend on each to assess their needs and then select a plan, but the major differences between these two options are as follows:

1. Sum Assured

In the case of a critical illness rider, the sum assured is related to the base life insurance policy and cannot exceed it. But, a standalone critical illness plan can provide you coverage as per your requirements. A separate plan becomes more beneficial for those buyers, who require a higher cover to deal with complicated diseases owing to their susceptibility due to genetics or other factors.

2. Policy Term

The critical illness rider is associated with a base policy so the term lasts as long as the term of the basic plan is useful. In the case of standalone policy, the term lasts for five years and then it has to be renewed. At the time of renewal, the insured has to undergo the medical tests again, and it is as good as buying a new plan. Also, in the case of a rider, the coverage will cease to exist the moment the basic plan expires and has to be re-insured.

3. Premium Payments

Critical illness rider plans are cheaper since they are associated with an existing base policy and they last over a long term as well. As the standalone plan needs to be renewed every five years, the premium amount tends to go higher due to increasing age and change in the medical condition of the insured. As such due to individual health cover with a substantial coverage, standalone plans attract higher premiums.

4. Number of Diseases

An autonomous policy will cover more critical illnesses compare to an add-on critical illness plan that is limited by the base insurance policy it is a part of. If you want to play extra safe and cover as many critical illnesses as possible in your health plan, you can select a standalone cover.

5. Number of Claims

With a critical illness rider, you can file a single claim during a policy year, but with a standalone policy, there is an option of filing for multiple claims within a policy year, subject to the conditions of your insurer.

6. Survival Clause

Both types of policies are similar in the way that they have a survival clause. This means that the insured must survive for a particular number of days from the date of diagnosis of the critical illness to receive any benefits.

As you can see both have their own merits and demerits compared to each other. The final decision will be yours based on a thorough analysis of your requirements. Make the best decision as your life is at stake!

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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