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Critical illness demands a swift medical intervention and offers a ray of hope for recovery. Alternatively, the solemn reality of a terminal illness is inevitably the journey toward death. Understanding the difference between the two will help us make a well-informed decision for life insurance coverage.
In the maze of life’s uncertainties, formidable challenges like critical illnesses can disrupt the very existence of your life, presenting emotional and financial burdens. Some critical illnesses also become terminal illnesses and claim lives. That is why they demand immediate medical intervention.
Insurance covering critical illnesses offers a ray of hope for recovery. On the other hand, terminal illnesses have no cure and drive you toward life’s inevitable end.
Amidst these harsh realities, life insurance plans emerge as a vital helpline. The financial shield helps you manage your treatment exigencies and secure your family.
Here is a detail explaining the difference between critical illness and terminal illness and the role of insurance as a financial support.
What Is A Critical Illness?
A critical illness is a life-threatening medical condition requiring immediate medical attention. It can cause excessive damage to the vital organs of the body.
The severity of the critical illness condition demands prompt medical intervention to prevent further deterioration and save your life with timely actions.
Common examples of critical illness are cancer, stroke, heart attack, organ failure, etc.
What Is A Terminal Illness?
Terminal illness is a medical condition without an identified cure and can eventually lead to death. Despite timely medical intervention and efforts, the illness will continue to worsen in the body and can decline your overall well-being.
Common examples of terminal illness are advanced stages of cancer, end-stage organ failure, advanced stage of Alzheimer’s disease, neurological diseases, etc.
Terminal Illness vs Critical Illness
Now that we know the meaning of critical illness and terminal illness, let us understand the difference between critical illness and terminal illness.
Parameter |
Terminal Illness |
Critical Illness |
Illness |
Terminal illness does not have an identified cure. |
Critical illness have a cure. However, the treatment is costly and can end up fatal. |
Focus of treatment |
The treatment can manage symptoms, provide comfort, and improve quality of life. |
The treatment is for stabilising normal health conditions and saving your life. |
Recovery |
There are no chances of recovery, and the conditions can eventually lead to death. |
There are high chances of recovery if provided with timely medical treatment. |
Insurance claim benefits |
The terminal illness insurance benefit can be claimed when diagnosed with a terminal illness as listed in the policy document. However, the claim benefit will be provided if your life expectancy is less than 12 months. |
The critical illness insurance benefit can be claimed when diagnosed with a critical illness as listed in the policy document. And it is not necessary that you have to be hospitalised to claim the benefit. |
Sum assured in Life Insurance |
Terminal illness insurance might provide up to 50% of the sum assured of the terminal illness cover to get the treatment for the illness. The remaining amount will be paid to the nominees as a death payout. |
Critical illness insurance provides the sum assured as a lump sum or any other payout option for medical and hospitalisation expenses. |
Critical Illness Insurance Cover
Life insurance plans provide an add-on rider# benefit to help cover critical illnesses. The critical illness insurance cover provides financial support to pay for the medical and hospitalisation expenses when you are diagnosed with a covered critical illness during the policy tenure.
Benefits
The critical illness insurance benefit can be used for recovery, such as treatment or rehabilitation.
The remaining amount can be utilised as a replacement income to pay for clearing off debts, loans and liabilities.
You can focus on the recovery as the financial benefit can be utilised for the treatment. And your family’s financial commitments are fulfilled with the necessary funds.
The premium paid for a health rider# will qualify for the tax* deduction benefit under Section 80D of the Income Tax Act 1961, and the payout is tax*-exempt, subject to the prevailing income tax* laws.
Who Should Purchase The Critical Illness Insurance Cover?
If your family’s medical history reveals that there have been multiple instances of the members getting affected due to a critical illness, a critical illness insurance cover is highly recommended.
If your family is overburdened with financial commitments and you want to manage your medical expenses, critical illness insurance coverage is ideal. It can help you contribute to the expenses and work on a speedy recovery.
Terminal Illness Insurance Cover
Life insurance plans provide an add-on rider# benefit to help cover terminal illnesses. Some life insurance plans can also offer an inbuilt cover against terminal illnesses.
The terminal illness in term insurance and other life insurance cover provides financial support to help focus on end-of-life care and reduce your family’s financial burden when you are diagnosed with a terminal illness during the policy tenure.
Benefits
The terminal illness insurance cover can be used to pay for the medical expenses for the end stage of treatment.
The family can utilise the terminal illness insurance benefit to pay for clearing off debts, loans, and liabilities.
The payout can help the dependents settle and secure their future livelihood.
The premium paid for a health rider# will qualify for the tax* deduction benefit under Section 80D of the Income Tax Act 1961, and the payout is tax*-exempt, subject to the prevailing income tax* laws.
Who Should Purchase The Terminal Illness Insurance Cover?
If you are the sole earning member of your family, terminal illness insurance is an essential option.
If you want to settle your dependents and secure their future in the event of your unexpected demise due to a terminal illness that is highly probable based on your lifestyle, work, and family conditions, terminal illness insurance is an ideal option.
With our Tata AIA Life Insurance health riders#, you can choose from multiple payout options such as the lump sum, a combination of both lump sum and regular income, or a regular income.
