Terminal Illness Rider in Life Insurance

What is a Terminal Illness?

What is the Difference Between Terminal Illness and Critical Illness?

Point of Comparison Terminal Illness Critical Illness
Severity of Disease Refers to a medical condition or disease that has reached an advanced stage and is expected to result in the patient's death. Refers to a severe illness or medical condition that is listed in the policy and may not necessarily result in the patient's death.
Treatment Availability Treatment options are usually limited. Treatment options are available and often involve advanced and specialized medical interventions, surgeries or therapies.
Focus of Treatment The treatment focus shifts towards palliative care to alleviate symptoms and improve the patient's quality of life. The treatment focus is to treat or manage the critical illness.
Examples Examples include advanced-stage cancer, end-stage organ failure, advanced Alzheimer's disease, and certain neurodegenerative disorders. Examples include heart attack, stroke, major organ transplant, kidney failure, certain types of cancer, and other serious medical conditions as specified by the insurance policy.

What is a Terminal Illness Rider?

How Does a Terminal Illness Rider Work?

Who Should Buy a Terminal Illness Rider?

Benefits of Terminal Illness Rider

FAQs About Terminal Illness Rider

Is a Terminal Illness Rider Available for all Types of Life Insurance Policies? up-arrow

Terminal illness riders are commonly available for term life insurance and permanent life insurance policies. However, the availability may vary among insurance companies. 

Does the Terminal Illness Rider Affect the Remaining Death Benefit? up-arrow

The accelerated payout received through the terminal illness rider reduces the remaining death benefit payable to the beneficiary upon the policyholder's death.

Is the Terminal Illness Rider Available for All Ages? up-arrow

The availability of the terminal illness rider may vary based on the age of the insured. Some insurance companies may have an age limit for adding the rider to a policy. 

Are There Any Tax Implications for the Accelerated Payout Received Through the Terminal Illness Rider? up-arrow

In India, the accelerated payout received through the terminal illness rider is generally exempt from income tax under Section 10(10D) of the Income Tax Act. However, it is important to note that the tax benefits are subject to change as per the prevailing tax laws. 

Can the Terminal Illness Rider be Claimed More than Once? up-arrow

No, the terminal illness rider typically allows for a one-time accelerated payout if the policyholder is diagnosed with a terminal illness during the policy term.

Will the Terminal Illness Rider Affect the Premium of the Life Insurance Policy? up-arrow

Adding a terminal illness rider to a life insurance policy may increase the premium slightly. The exact impact on the premium will depend on various factors, including the policyholder's age, health condition, and the coverage amount.