Secure Your Future with Critical Illness Insurance

Protect yourself and your loved ones from the financial burden of a serious illness. Get peace of mind with critical illness insurance.

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With the current lifestyle, there has been a significant increase in critical illnesses. This is coupled with an excessive rise in the cost of pharmacy bills and treatment facilities, making it even more challenging to tackle such unforeseen events. Financial stability is one of the most basic approaches that can be beneficial in such circumstances. In this article, learn about the benefits, coverage, and costs of this type of insurance policy.

What is Critical Illness Insurance?

Critical illness Insurance is a plan which aims to provide a lump sum amount to the policyholder in case of a diagnosis of a critical illness. The illnesses are predefined in the policy. It is one of the most beneficial ways to cover high medical emergency costs. It provides extra coverage for illnesses like cancer, heart attacks, or strokes.

What are the features of Critical Illness Insurance?

The main features of Critical Illness Insurance are as follows.

Tax exemption: The premium paid towards Critical Illness Insurance qualifies for tax exemption under Section 80C of the Income Tax Act. Some conditions to avail of tax benefits under this section are:
- The restriction on tax deduction is up to 10 percent of the sum assured.
- The minimum holding period of a Life Insurance Policy is two years to avail of tax benefits.
- The maximum deduction is up to rupees 1.5 lakhs for one financial year.
- Any mode of payment can be used to make the payment.

Lump sum payout: A lump sum amount is paid to the policyholder on diagnosing a critical illness. Enormous financial burdens accompany health emergencies. This may also coincide with a loss of income. This further escalates the problems because of the country's high cost of medical facilities. This is why this cover can be of great use in medical emergencies.

High coverage amount: The premiums for Critical Illness Insurance are usually lower and provide a considerable payout upon diagnosis. This amount can be used for multiple purposes like paying medical bills, travel, sustenance, mortgage payments etc.

Hassle-free experience: The modern digital world has made purchasing Critical Illness Insurance online highly convenient. The best way to find a suitable policy is by comparing the inclusions and exclusions of the various insurers.

Trouble-free claim process: Payout can be requested soon after the diagnosis. Hospitalisation is not necessary to avail of benefits.

Who needs Critical Illness Insurance?

Critical Illness Insurance is most beneficial to the following.

Sole earners

If you are the family's primary bread earner, consider opting in for the Critical Illness Insurance plan. This might not just be helpful to you while you are out of the workforce but also for your dependents.

Family history of critical illness

Genetics and heredity play a crucial role in understanding the probability of future generations developing a medical condition. If a senior member of the family has a history of diseases like cancer, coronary heart disease etc., you must opt for a critical illness cover.

People above 40 years of age

The vulnerability of developing a critical illness increases after age 40. Therefore, opting for a Critical Illness Insurance plan at this age can be a prudent choice.

Main benefits of Critical Illness Insurance

Here are the main benefits of buying Critical Illness Insurance.

Critical illness cover is the most reliable method of dealing with medical emergencies.
It prevents you from burning out your hard-earned savings.
It helps you pay for medical and non-medical expenses, which means it provides financial security to your dependents as well.
The outstanding payments like mortgages, home loans, car loans can also be taken care of through the payout.
Health emergencies come with a tremendous emotional burden which can be tackled by ensuring financial stability. Therefore, Critical Illness Insurance is one of the advisable ways to tackle such crises.
Since the payout is a lump sum amount, it helps to manage overall costs better.
It caters to various critical illnesses, and all associated expenses can be taken care of.
Diagnosis of an illness is enough for the policyholder to avail of benefits. Inpatient treatment is not needed.

List of illnesses covered under Critical Illness Insurance

Some of the most common critical illnesses listed under Critical Illness plans are as follows.

Heart attack
Major organ transplant
Cancer
Paralysis
Coronary artery bypass surgery
Stroke
Kidney failure
Muscular dystrophy
Liver failure
Major organ transplant
Permanent loss of speech
Permanent blindness
Permanent deafness
Brain surgery
Coma
Third-degree burns body
Terminal illness
Poliomyelitis
Alzheimer’s disease
Parkinson’s disease
Motor neuron disease
Major head trauma
Brain tumour
AIDS

How is a Critical Illness Plan different from a normal health insurance plan?

The basic differences between a Critical Insurance Plan and a health insurance plan are given below.

Factors	Critical Illness Insurance	Health Insurance
Renewability	Annually but terminated immediately after payout.	Annually. It may remain active even after the claim is settled depending upon the terms and conditions of the insurer.
Payout structure	The amount paid is fixed and may not depend on the expenses incurred by the policyholder.	The amount is paid to meet the actual treatment costs and it is subject to the maximum insured amount.
Waiting period	Usually up to 90 days of purchase depending upon the terms and conditions of the company.	Usually up to 30 days of purchase as stated by the insurer
Family	Individual only as per policy terms	Individual or family policy
Need	Above 40 years of age as beyond this age, vulnerability to develop a critical illness increases.	Everyone needs a Health Insurance plan as it provides large financial coverages for most medical treatments.
Existing illness	Not covered	Usually covered up to 4 years. May vary according to the rules of an insurance company.

How to buy Critical Illness Insurance?

The purchase can be made by consulting an insurance advisor as required. You can reach online and offline channels to buy a Critical Illness Policy. Here are the possible options.

Rider along with a Health or Life Insurance Plan
Standalone Critical Illness Insurance Plan

Choosing one of the options above is based on personal preferences. The addition of critical illness protection as an add-on/rider to a newly purchased/renewed policy is limited to the benefit of the maximum sum insured.

Documents required to file a claim

A must-have document to file a claim covered by Critical Illness Insurance is a diagnostic report of the illness. The insurance carrier must be contacted, and the claim needs to be registered if the policyholder wants to avail the benefits of the policy. Here is a list of documents that you may need to file a claim under your Critical Illness Plan.

Filled claim form
Records of hospitalisation, pre and post
Records of consultation regarding the existing illness
Proof of diagnosis through medical tests/diagnostic reports
A copy of any identification card and bank transfer details/cancelled cheque

Upon the verification of the documents, the benefit will be disbursed, subject to the terms and conditions of your policy.

Note: The required documents may vary as per the rules of the insurer.

Costs of Critical Illness Insurance in India

Critical Illness Insurance costs depend on age, health condition, coverage amount, policy tenure, and the insurance provider. The premium for this policy is generally higher than regular health insurance policies due to the high risk associated with critical illnesses. However, the cost of the policy can be reduced by choosing a lower sum assured, opting for a shorter policy tenure, and comparing the premiums offered by different insurance providers.

Points to remember before buying a Critical Illness cover

Thorough research and comparisons must be made to address your preferences best. The most important points to remember before buying a Critical Illness Plan are as follows.

Inclusions

Take a look at the list of illnesses covered under your policy. Also, nuances such as when the coverage would commence, at what stage or degree of the terminal illness, etc., are advised to be noted carefully.

Exclusions

Being aware of the limitations or boundaries of your policy is equally significant.

Policy benefits

It is important that you make a note of the additional benefits. For example, how long is the claim-free period during renewals.

Filing claims

As the pay-out of the Critical Illness Policy is designed differently, one needs to be diligent with the complete process of filing the claim to pay out and knowing the required documents, etc.

Age limit

Noting the maximum age until the policy covers you is important. Some insurers might request regular health check-ups to keep a track of your health status. Avoid missing these appointments.

Survival period

It is the period which the patient must survive, from the date of diagnosis up to the specified time, to benefit from the policy coverage. So, the shorter the period, the greater the chances of using the coverage.

Frequently Asked Questions (FAQs)

Here are some common questions about Critical Illness Insurance.

Are pre-existing illnesses covered under this policy?

No, pre-existing conditions are not covered under Critical Illness Insurance.

Do I have to undergo a compulsory health check-up?

Yes, most insurance companies ask buyers to undergo a medical health check-up as a prerequisite.

What is the maximum sum that can be insured under this policy?

Most insurers provide a sum of up to rupees 50 lakhs. Kindly read the policy document carefully for detailed information.

Can I claim this policy for multiple medical conditions?

No, Critical Illness Insurance cover can be availed for one illness only.

If I have claimed the policy once, can I renew it?

No, if claimed once, the policy is terminated and cannot be renewed. You must buy a new policy.

Does Critical Illness Insurance cover all illnesses?

Most critical Illnesses are covered by Critical illness Insurance Plans. Exclusions under this category vary from one insurer to another. Kindly read the policy document for more information.

Do Critical Illness Insurance Plans have higher premiums than health insurance plans?

No, different insurers provide different benefits and come with varying prices. The best way to find a suitable policy is to compare the plans with other providers.

Is the amount disbursed immediately after the diagnosis of the illness?

The time taken to disburse the amount post-diagnosis is usually short and can be up to 90 days. This may vary from one insurance company to another.

Can I transfer my Critical Illness cover from one insurance company to another?

Yes, according to the rule passed by IRDAI - Insurance Regulatory Development Authority of India in 2011, you can transfer your policy from one company to another. Read the policy document for more information.

Should I buy Critical Illness Insurance?

Yes. Critical Illness cover provides a monetary cushion to you and your dependents in life-threatening circumstances and financial hardships.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.

Secure Your Future with Critical Illness Insurance

Here are some common questions about Critical Illness Insurance.

Are pre-existing illnesses covered under this policy?

Do I have to undergo a compulsory health check-up?

What is the maximum sum that can be insured under this policy?

Can I claim this policy for multiple medical conditions?

If I have claimed the policy once, can I renew it?

Does Critical Illness Insurance cover all illnesses?

Do Critical Illness Insurance Plans have higher premiums than health insurance plans?

Is the amount disbursed immediately after the diagnosis of the illness?

Can I transfer my Critical Illness cover from one insurance company to another?

Should I buy Critical Illness Insurance?

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