The Benefits of Taking up Critical Illness Insurance

Mumbai(News desk): We live in times where lifestyle-related diseases are on the rise, adding to the number of things that the human body can suffer from. According to the estimates of various domestic medical organisations, the instances of these kinds of diseases are on the rise. One in four Indians, before the age of 70, is likely to be affected by non-communicable diseases. Cancer or cardiovascular diseases, for example.

Curing serious ailments like these can cost a bomb, and the sum will reach into the lakhs.

If you already have a medical insurance plan (Family Floater or Mediclaim), it’s time to reconsider and upgrade to a Critical Illness Insurance plan. It’s often believed that one should take up a critical insurance plan after the age of 40, but starting early has its own perks.

This is because, when you’re young, you’re healthier, which translates to cheaper premiums.


Core Features

One of the major features of critical illness health insuranceschemeis that you’re eligible to claim a lump sum amount after being diagnosed by a serious illness. The number of serious illness covered differs according to policies.

Some illnesses that are usually covered under this health policy include cancer, bypass surgery, kidney failure, heart attack, organ transplant, coma, paralysis, neuron diseases, multiple sclerosis, and coronary artery bypass graft.

An insurance company can also cover other diseases based on their discretion.

How it Works

A critical illness plan differs from a regular insurance plan like Mediclaim. It pays you a lump sum amount (equivalent to the amount insured), in case you’re afflicted by a serious disease like a stroke or some form of cancer.

Under this insurance cover, the insurer takes care of your treatment and recuperation expenses, and could also pay off your debts, if you’ve taken on any. Irrespective of your medical expenses, the insurer pays you the full insured amount.

Some consider CI to be better than Mediclaim for this reason. Mediclaim plans are usually a compensation plan, and only reimburse the incurred expenses.

What and howmuch is covered?

Most insurers cover about 8-20 critical diseases. The amount covered can be upward of INR 15 lakhs.

According to financial experts, you should look for policies depending upon factors like your employment type, family history in terms of diseases, age, and medical inflation. Ideally, you should aim for a cover of at least INR 15 lakhs. This is because the entire sum for your treatment and rehabilitation will be credited to your bank account after you’re diagnosed with a serious ailment.

What is the Waiting Period?

One of the main aspects of CI plans is that the insured patient has to survive for 30 days after being diagnosed with the disease, to be able to make the claim. Besides, there’s a waiting period of 90 days at the start of the health policy. Any serious diseases detected before the first 90 days, and death within 30 days, will not usually be covered.

Where Should You Look For a CI Plan?

Critical illness plans can be bought from a general insurance (non-life insurance) company, an insurance company, or a standalone health insurance firm.

Life insurance companies offer you the option of getting your CI as a separate plan, or as a rider to the base plan. If added as a rider plan to the base plan, there are usually 2 situations:

1.      The base policy continues after the critical illness rider is used

2.     The base policy comes to an end once the CI rider is used (although, the premium could be less when compared to the first situation)

In the second situation, you might be deprived of your life cover after exhausting the CI rider.

To keep these situations from blindsiding you, thoroughly vet the insurance cover before buying it.

You can buy a CI plan as a Family Floater or as an individual plan. Some insurance companies may allow you to add CI plan to a base Mediclaim plan. Although, the tenure of a CI plan offered by a non-insurance company is usually smaller than the ones offered by life insurers.

The Tax Benefits under Critical Illness Plan

CI plans bought from any company give you tax benefits under Section 80D. These tax benefits may vary from person to person. Before you choose to opt for a Critical Illness Insurance Plan, you must understand that it’s not an alternative to a general health insurance plan. It can only act as a supplement to your regular health plan. Irrespective of whether you take up a CI plan or not, you should always have a regular health plan.