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Life insurance helps protect your family to be financially secure and happy in case of an unfortunate demise of the policyholder. If in case a policyholder is diagnosed with a terminal illness, you may be able to claim but it depends on the insurance company and the terms of your life insurance cover.
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Terminal illnesses are incurable ailments and diseases. Regrettably, these kinds of illnesses are increasing, majorly in urban regions, thus results in a low life expectancy of the individuals who are suffering from terminal diseases. The example of terminal illnesses are heart disease, lung diseases, etc. In these situations, having terminal illness in term insurance is a necessity. It is a type of life insurance policy that pays out upon the diagnosis of a terminal illness. In this, the nominee/beneficiary receives the sum assured amount along with an additional bonus after the policyholder’s death. Some insurers also provide an option to pay 25 percent of the sum assured to the insured if their assumed life expectancy is less than 12 months. However, in these circumstances, the death benefit is generally reduced to an equivalent amount that is already paid for the policyholder’s treatment. Therefore, it is very important to understand what is terminal illness in term insurance to avail its benefits whenever required.
Term Plans
Now that we have discussed Terminal Illness meaning, let’s understand how to get early payout in terminal illness insurance. A Terminal Illness Payout is an early death payout. This means that the insurer will pay what they would otherwise have paid out in case of a policyholder’s death because in terminal the insurer can see the death within a policy tenure. Some insurers have also excluded the terminal illness early payout if the insured received their diagnosis reports of terminal illness in the last 12-18 months of the policy tenure. This is because if the diagnosis was made in the last 12-18 months, then in that case death might happen after a policy has ended. However, after the death of the policyholder, the insurer provides a payout to your loved ones but they cannot make an early claim on term insurance based on the terminal illness diagnosis.
Once the policyholder informs the insurer, they contact the respective hospital and request all the required details about your medical condition. This will give them an idea of your correctness and your life expectancy. After approval from the hospital, the insurer decides the early payout of the sum assured.
People suffering from severe illnesses such as bypass surgery, organ failure, cancer, heart diseases, Alzheimer’s disease, blindness, deafness, brain tumors, etc. are mentioned on the company’s brochure.
Note: It is suggested to calculate the term plan premium on the term insurance calculator online tool by Policybazaar before buying the plan.
With terminal illness benefit, your family member is protected to face future uncertainties or unpredictability. As discussed, policyholders have the option to avail 25% of the sum assured amount for his/her treatment. One of the amazing benefits of term insurance cover is that it provides financial support to your family when you are not employed that generally applies after the diagnosis of a terminal illness.
Early claim on terminal illness is very important as it is very rare that an individual dies suddenly because of the terminal illness. Early payout helps you to go through alternative medical treatment and you also get the chance to spend time with your loved ones.
Most of the medical insurance policies offer different premium charges after the different points of time, but a term insurance policy along with a terminal illness cover extends for a high amount of coverage at the most inexpensive premium charges. This is due to the rising costs of managing a terminal illness that ranges from 20lac to 50 lacs. So, it is always suggested to take terminal illness cover along with a term insurance policy if you are facing any terminal illness.
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While applying for life insurance, the policyholder is required to provide details about his/her health condition and also past medical records. Insurers also want policyholders to undergo a medical examination that helps in determining the overall individual’s health. So, if you have already been diagnosed with a terminal illness before buying any cover, then the insurer will reject your application of early claim on terminal illness to provide you any cover for illnesses.
Note: Know what is term insurance first and then buy a term plan for your loved ones.
Critical illness is also a very critical condition but is curable using intensive medical treatments, thus not necessarily leads to death. In this, the policyholder is provided with only a one-time fixed option. But after availing it, no more benefits are provided from the insurer till the renewal of the policy.
|
Benefit Types |
Terminal Illness Insurance |
Critical Illness Insurance |
|
Sum Assured Amount |
The policyholder can claim 25% of the sum assured if he/she needs money for the terminal illness treatment. |
Policyholders can avail of a lump sum amount along with a one-time fixed benefit during critical times. |
|
Availability of claims |
You can protect your family members as this insurance gives a valuable benefit to the nominee after your death |
You can claim a benefit even if you are not hospitalized |
|
Other Benefits |
Financial benefits will be provided to the policyholders only, in case he/she has a terminal illness and the life expectancy is less than 12 months. |
Financial benefits will be provided only when they suffer from a critical illness. |
Terminal illness is a free benefit that is mainly attached to life insurance policies. Early payout is possible in terminal illness cases. If you have been diagnosed with a terminal illness and your life expectancy is less than 12 months, then you can claim this benefit. Term insurance along with the terminal illness cover is beneficial as it assists you and you're loved during the critical times. One should always be aware be of the features and benefits of the availed benefit. This will help you make an informed decision.
Note: Check out the term insurance plan in India and choose one that suits your requirements.
†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
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