Buying Critical Illness Cover? Know How It Works First

According to the World Health Organization, in India, one in four people is at high risk of dying from critical illnesses such as cardiovascular disease or cancer, before the age of 70[1]. There are several factors including, certain genetic factors and ageing that contribute towards increasing the risk of developing a life-threatening ailment.

Also, the treatment costs for critical illnesses can skyrocket quickly, which is why you cannot rely on your savings alone to bear the expenses. It would help if you had additional financial protection through critical illness policy coverage, either as a standalone policy or as an add-on with top term insurance plans.

In other words, term insurance meaning is all about protection against life’s uncertainties, a stand-alone critical illness policy (CI) helps you financially in fighting off life-threatening ailments such as cancer or kidney failure. Buying a critical illness policy at an early age, thus, is a smart pre-emptive decision because then you will have to pay a lesser than what you will in your 40s.

How Does A Critical Illness Policy Work?

The critical illness policy is slightly different from regular Mediclaim or health insurance plans. Under a critical illness policy, the insurance company will pay a lump sum up to the Sum Assured to you in case you develop any of the critical illnesses specified in the policy. You can use the amount received to pay for treatment costs, recovery costs and other daily expenses of the family.

How Much Coverage Is Available Under A Critical Illness Policy?

With the continually rising cost of quality healthcare, it is quite clear that the total cost of treatment for critical illness would require lakhs of money. For most middle-class Indian family, it is not always possible to pay for the treatment out of their pocket. In most cases, a critical illness renders the patient’s earning capacity as well.

It is therefore advisable that you purchase a critical illness policy or as an add-on only after taking into consideration important factors such as the type of employment, family history, age, and medical expenditures.

According to industry experts, in the light of current medical inflation, when buying a critical illness policy, a substantial cover amount should be chosen as this would facilitate the minimum requirements of a person to get proper treatment and rehabilitation for the disease. It could be from 15 lakhs to 1 crore, depending on the requirements and affordability.

What All Is Covered Under A Critical Illness Policy?

Although the number of health problems and acute diseases covered varies from one policy to another, some of the major illnesses and conditions insured by all critical illness insurance policies are:

  1. Heart attack
  2. Coronary artery bypass surgery
  3. Cancer
  4. Kidney failure
  5. Aorta surgery
  6. Stroke
  7. Paralysis
  8. Heart valve replacement
  9. Primary Pulmonary Arterial Hypertension
  10. Benign Brain Tumour

How Much Is the Waiting Period on Critical Illness Policy?

One of the essential aspects of a critical illness policy is that you have a waiting period before you can avail of the policy benefit. In most cases, the plan itself also has a 90-day waiting period at the beginning of the plan, and any critical illness diagnosed within the first 90 days of the plan is not eligible for a claim.

What Are the Benefits of a Critical Illness Policy?

Clinical illness can drain the finances of an individual unimaginably, and because they arrive without notice, it is better to stay secured with a critical illness policy. Some of the benefits that a critical illness policy or add on provides are:

  1. It Acts as An Income Substitute

Critical illnesses do affect an individual not only physically but also significantly impacts the family’s finances. A critical illness policy pays a lump sum amount to the insured, that can be used to fund medical and household expenses.

  1. It Enables Substantial Tax Benefits

Under Section 80D of the Income Tax Act, any pay-out from a critical illness policy is tax-free.

  1. It Provides Peace of Mind

Critical illness policy provides peace of mind as it makes it possible for an individual to concentrate more on medical treatment rather than arranging funds for medical and household expenditures.

  1. It Helps Increase Chances of Survival

Critical illness policy offers high life cover at affordable rates, which allows you and your loved ones to stay financially secure. It also supports quality healthcare so that the chances to fight and win over a critical illness increases.

Secure Yourself with Critical Illness Benefits

It is imperative to opt for a critical illness policy, as a standalone or as an add on with top term insurance plans or health insurance. It helps you come out of situations that you would instead not want to be stuck in – a position where you cannot support yourself or your loved ones for lack of money.

While the critical illness claim settlement process is pretty straightforward, make sure that you are mindful of the exclusions and claims mechanism set out in the policy’s terms and conditions. A Critical illness policy offers affordable and comprehensive financial protection against lifer threatening ailments. It would be best if you compared premium rates using an online premium calculator to choose the best critical illness policy available. Stay Insured and enjoy your life!

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