Most of us feel a sense of relief knowing that we have health insurance. But what if that sense of security isn’t the whole picture? A major illness like cancer or a heart attack can expose certain gaps in your policy that you didn’t even know existed. That’s where critical illness cover comes in to protect you and your loved ones when it matters the most. In this article, we’ll explore these gaps in regular health insurance plans and explain how a critical illness policy can fill those gaps so that you have complete financial protection during a health crisis.
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1. No coverage for loss of income
If you're diagnosed with a major illness, you may have to take months or even years off work. Your health insurance pays for your hospitalisation, but doesn’t cover income loss.
How critical illness cover helps:
It provides a lump-sum payment, which you can use to replace lost income or run your household during recovery.
2. Limited non-hospitalisation support
A critical illness doesn’t just bring physical and emotional strain, it often comes with massive, unexpected expenses. Out-of-pocket costs like travel, home care, second opinions, or experimental treatment are often excluded.
How critical illness cover helps:
You’re free to use the lump sum however you wish to, even for non-medical costs and recovery-related expenses.
3. Limited coverage for expensive treatments
Recovering from a critical illness, like cancer therapies or organ transplants, often takes months or sometimes years, and might require more support than what a standard health plan provides. Room rent limits, sub-limits, and co-pay clauses can drain your savings.
How critical illness cover helps:
That one-time payout can cover prolonged care, without worrying about whether your policy’s limits have been exhausted.
4. No coverage for lifestyle adjustment
Life after a critical illness often requires changes, such as wheelchair-friendly homes, diet counselling, physiotherapy, or even mental health therapy. Health insurance rarely covers these rehabilitation or lifestyle adjustments.
How critical illness cover helps:
The lump sum gives you the freedom to redesign your life post-illness.
5. Sum insured is not enough
Many people buy health insurance with typically a ₹5–10 lakhs sum insured, thinking it’s enough. But advanced critical illnesses can cost more than ₹25–30 lakhs. You may exhaust your coverage quickly, especially with long-term or multiple hospitalisations.
How critical illness cover helps:
It acts as a financial backup, giving you an additional layer of protection.
Ideally an individual should have both, because they complement each other. Let’s take a look at how it does that.
| Feature | Health Insurance | Critical Illness Cover |
| Covers hospital bills | Yes | No |
| Lump-sum payment | No | Yes |
| Covers non-medical expenses | No | Yes |
| Income replacement | No | Yes |
| Premium | Based on age and sum insured | Based on age, sum insured, and illness covered |
Critical illness insurance is a policy that provides a lump-sum payment if the insured person is diagnosed with a serious medical condition that's covered under the plan. This amount is paid directly to you and can be used for treatment costs, lifestyle adjustments, or even income replacement, giving you financial security during a tough time.
Unlike regular health insurance, which reimburses hospital bills, critical illness coverage offers a one-time cash benefit that a policyholder can use however they wish to.
Purchasing the policy
You buy a critical illness policy or add it as a rider to an existing health or life insurance plan. The policy defines a list of covered illnesses and a sum insured, for example, ₹10–20 lakhs.
Waiting period
Most policies have a waiting period, which is typically 90 days from the policy start date, during which no claims are accepted. Coverage begins after this waiting period.
Diagnosis of a critical illness
If the insured person is diagnosed with an illness that is covered by the policy, like cancer or a heart attack, you can file a claim. The diagnosis just needs to be confirmed by a qualified/certified doctor as per the insurer’s guidelines.
Survival period
In many plans, the insured person needs to survive for at least 30 days after being diagnosed to receive the payment. This rule is in place to make sure the money is used for treatment and recovery, not as a death benefit.
Lump-sum payment
Once the claim is approved, the insurer pays the entire sum insured in a single payout. You are free to use this money for treatment, post-hospitalisation care, or even non-medical expenses like loan repayments or home modifications.
Policy termination or continuation
In most cases, after the payout, the policy terminates because the full sum insured has been paid. Some advanced plans offer multi-claim or reinstatement options for additional illnesses.
Most plans cover a range of severe conditions. The exact list will vary from insurer to insurer, but typically includes:
While your health insurance plan is essential, it isn’t always enough when you’re facing a major illness. A critical illness policy complements it by giving you the financial flexibility to deal with real-life challenges, whether it’s treatment costs, income loss, or recovery time. It’s a small step today that can make a big difference tomorrow.
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Reviewed by Dr. Harshita Dahiya 
Acko Technology & Services Private Limited
#36/5, Hustlehub One East, Somasandrapalya, 27th Main Rd, Sector 2, HSR Layout, Bengaluru, Karnataka 560102
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