Does term insurance cover critical illness?


5 min read

Updated on Sep 21, 2023

Being diagnosed with a critical illness can not only be an extremely difficult life event for an individual but also the beginning of a stressful period for their entire family. Some critical illnesses such as cancer and brain surgery have a high morbidity rate making the treatment very complex and the recovery a time taking process. This is why while buying a term insurance plan, many insurance providers and agents suggest taking a critical illness insurance cover as well.

How does critical illness insurance cover work?

Before you buy a critical illness insurance cover, you need to know how it works. When you buy an insurance policy with a critical illness cover, there is a list of critical illnesses that are mentioned in the policy. Upon the policyholder being diagnosed with any of these, they are offered a lump-sum amount. However, in some of the policies, the insurance companies may decide to make the payout after 30 days of survival from the date of the first diagnosis.

Visual Stories by Mahindra Paybima

What to consider while buying a critical illness plan?

Here are some of the points to consider before opting for a critical illness plan.

  • If the plan is for 30 years, the life cover will continue even after the benefit of selected critical illnesses is claimed
  • Under a critical illness rider category, you will be able to get the full benefit amount for a critical illness cover
  • The total sum insured is paid when the policyholder has passed away or in case of a total permanent disability
  • You can settle the claim within 21 days of receiving the required documents
  • You will be eligible to save taxes under Section 80C and 80D of the Income Tax Act on the premium paid for the insurance policy
  • In some of the cases, a few critical illnesses are not covered for claims if they are diagnosed within 90 days from the starting date of the policy.


14 Types of Critical Illnesses Covered by Term Insurance Plan in India

The critical illness list that is covered by most term insurance is mentioned herein below:

  1. Angioplasty
  2. Alzheimer’s Disease
  3. Aplastic
  4. Apallic Syndrome
  5. Anaemia
  6. Major Burns
  7. Brain Surgery
  8. Coma
  9. Cancer
  10. Parkinson’s Disease
  11. Deafness
  12. Blindness
  13. Encephalitis
  14. Heart Surgery

What are the Benefits of Term Insurance Plans with a Critical Illness Cover?

Here are some of the benefits that you get when you buy a term plan with critical illness insurance.

#1. Covers high medical expenses

Healthcare costs are at their peak in India. In one such scenario, getting admitted to the hospital for any illness can result in paying high medical bills. The expenses are endless as it includes tests, medication, surgery, and hospitalization. This is when a critical illness cover helps along with your term insurance plan. The lump sum amount you will receive can cover your medical bills.

#2. Premiums do not change

When you buy term insurance with critical illness cover, there will be no change in the insurance premium amount for the entire tenure. Even if you are diagnosed with a critical illness during the tenure of your policy, the premium will not change.

#3. Makes up for the loss of income

It could be really unfortunate if the sole earning member of the family is diagnosed with a critical ailment and because of which he/she cannot work anymore. Well, during one such time, a critical illness cover can be of real help. This cover will act as a replacement for the lost income. The kind of money the policyholder will receive can be used for undergoing the required treatment.

#4. Getting tax concessions

Buying a term plan with a critical illness cover will enable you to get extra tax benefits. Term insurance plan is covered under Section 80C of the Income Tax Act, 1961; and critical illness cover is exempted under Section 80D of the Income Tax Act. From these aspects, the proceeds of a term insurance plan are exempted under Section 10(10D).

#5. You can recover well

When you have undergone medical treatment and you have been asked to take rest for recovery, you need to take rest mentally as well. And with worries of paying bills and meeting ends cannot really let you be at peace. However, when you have term insurance with critical illness cover, you do not have to worry about the finances. You can rest assured that your medical bills will be paid.

Who Should buy a Critical Illness Cover?

Critical illness cover can be bought by anybody. However, if you fall in any of the below-mentioned categories, you must buy one.

# Those with a history of illness

Many people have illnesses that run in their family and at some point in their life, they also develop them. In one such case, it is wise to opt for a critical illness cover while buying a term insurance plan.

# People aged more than 40 years

People usually start developing illnesses after 40. Therefore, if you are advancing towards 40, you should buy it.

# The sole earning members

If you are the only earning member of your family and have dependents on you, it is time you should get a critical illness cover along with your term plan.

Thanks to the convenience of buying policies online, you can now compare the term insurance plans from various insurance providers and select the one that suits your needs the best. For most buyers, taking a critical illness cover with their term life insurance plan is a very prudent decision.

Also Read:

Found this post informational?

Browse Mahindra Paybima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance, and Investment section. You can visit Mahindra Paybima to Buy Insurance Online.

Also, check out the Mahindra Paybima’s Guide and Glossary section –

Other Term Insurance Products

Aug 23, 2022
Author Bio
Author Image

PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

Related Blogs

Would love to hear from you

Share your candid feedback. Your email address won’t be published, we promise!

All fields are required

Find your suitable insurance plan

Speak to our advisor

Mahindra Insurance Brokers Limited (A Mahindra Group Company) - Unit-202, A-Wing, 2nd Floor, Amiti Building, Agastya Corporate Park, Kamani Junction, LBS Marg, Kurla West, Mumbai - 400070. Tel: +91 22 66423800

Licenced by IRDAI License No. 261; License Validity : 17-05-2025; Category : Composite Broker; CIN : U65990MH1987PLCO42609 Member of Insurance Brokers Association of India (IBAI).

Insurance is the subject matter of solicitation.

For a seamless experience, use the latest version of Chrome/Firefox/Internet Explorer.

Copyright © 2023 Mahindra Insurance Brokers. All Right Reserved.

Get A Call Back
Get A Call Back