What is Critical Illness Health Plan?

Any extreme illness or disease that affects the overall well-being of a person, and requires treatment through a clinical practitioner can be termed as a Critical Illness. Unlike general health conditions, a critical illness frequently requires urgent treatment, and the expenses are way extra than any average treatment.

Here are some ailments that could be termed as critical illnesses:

  • Cancer
  • Stroke
  • Coronary Heart Disease
  • Heart Valve Surgery
  • Aorta Graft Surgery
  • Coma
  • Paralysis
  • Major Organ Failure/Burns
  • Pulmonary Arterial Hypertension
  • Multiple Sclerosis
  • Alziemer’s Disease

Need for a Critical Illness Insurance Plan?

We have heard of people having to quit their handsome-paying jobs after the diagnosis of a critical illness. In such a situation, this disease can impact their financial stability, drastically because of loss of income, while the person must pay a hefty amount for the treatment. However, due to today's medical advancements we'll live longer than our ancestors but, likely with serious medical conditions such as heart disease, stroke, cancer, kidney failure, liver disease etc. And living with these conditions costs a lot of money.

Usually, health insurance plans do not offer cover for critical illnesses in their plans. And even if they do, they offer it as an add-on over, thereby charging extra premium, which even then may be insufficient. Critical Illness insurance plans offer you extensive cover for all the deadly diseases listed under the policy. One should go for a critical illness policy even if they have a health insurance policy offered by their employer or otherwise, because a critical illness can occur to anyone at any time during a lifetime and because the expenses incurred on such treatment is huge. Also, critical illness plans come with lesser waiting periods and greater sum insured amounts as compared to regular health insurance policies.

Factors Critical Illness Insurance Normal Health Insurance
Scope It is designed to cover life-threatening critical illnesses that require immediate treatment and long-term medication. It provides comprehensive coverage for various diseases, including hospitalization and treatment expenses.
Benefit Hospitalization is not required to avail policy benefits. Diagnosis is enough to get a lump sum payment. The insured can get the reimbursement of incurred hospitalization expenses by submitting bills. You can also avail cashless facilities at network hospitals.
No.of Illnesses It covers up to 36 critical illnesses, including cancer, end-stage renal failure, brain tumor, etc. It covers different types of chronic diseases, medical treatments, and procedures.
Waiting Period Waiting period depends on the severity of illness. Generally, it has a 90-day initial waiting period. It has a 30 days initial waiting period and ranges up to 48 months for pre-existing diseases.

 



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Features of Critical Illness Insurance Plans

Here are the features of critical illness insurance plans:

Critical Illness Coverage

Coverage is provided for up to 36 major critical illnesses such as a tumour, cancer, kidney failure, heart ailments etc.

Lump-sum Payment

The insurer provides the lump sum payment for the treatment of covered illnesses.

Easy Claim Processing

Based on the diagnosis reports, critical illness claims can be easily processed.

Short Waiting Period

Critical illness insurance plans generally come with short waiting periods of up to 3 months. This means that the insured can start availing policy benefits soon after being covered.

Survival Period

There is a survival period of 30-60 days post diagnosis of critical illness, after which the lump sum is paid in full.

Income Replacement

A part of the lump sum can be used as an income replacement.

Covers Global Treatment

Under a critical illness plan, the insured gets a lump sum amount on diagnosis, which he/she can use to get treated in India or abroad. This means one can avail of treatment anywhere as per their preference.

Add-On Covers

Many insurers offer add-on covers along with critical illness plans that the insured can voluntarily opt for.

Tax Benefits

You can avail tax benefits under a critical illness insurance policy. The premium paid for critical illness plans are eligible for tax benefits under Section 80D of the Income Tax Act, 1961 along with medical insurance.

Who Should Purchase Critical Illness Policy?

A critical illness can happen to anyone. A critical illness insurance policy is a must-have insurance policy for anyone, at any age today, when the constant hectic lifestyle has increased risks of ailments, such as cancer, stroke, and heart attack. During such serious medical conditions, a family's financial stability is also compromised owing to the sudden rise in medical expenditures.

Hence, this health policy serves as a vital financial backup in such scenarios.

It is greatly beneficial for:

  • Individuals with a family history: If a critical illness runs in the family, it just increases the risk for you. Thus, a critical illness cover becomes an essential safety cover.
  • The only bread-winner of the family: Sole breadwinners of a family must think about their family's financial security and get a critical illness early.
  • Women Lives: The increasing cases of cancer in women are an alarming sign these days. Thus, investing in a critical illness policy is best advised if you are prone to such risks.
  • Individuals above a specific age bracket: Once you cross a certain age, usually 40, the risk of some critical ailments increases.
    So, staying prepared with a health cover will set the stage for a secure future.

Types of Critical Illness Health Insurance Covers

Critical illness covers offered by general and health insurance companies come in the following ways:

As Rider : A rider or an add-on benefit is an additional benefit that you can purchase under a traditional health insurance policy by paying an extra premium. In this type, the coverage depends on the base policy under which you are buying the rider. The coverage amount rider cannot exceed the coverage of the base policy. One of the benefits of buying a rider is that there is no requirement for a medical test.

As Standalone Policy: A standalone critical illness policy provides comprehensive coverage to the insured on a fixed benefit basis. A medical test is mandatory for this type of policy. Also note that a standalone critical illness is portable while a rider alone cannot be ported.

What Is Not Covered by Critical Illness Insurance?

Exclusions vary with different critical illness insurance plans. Generally, these plans do not cover you for the following expenses:

  • Any dental care or cosmetic surgery
  • Expenses related to hormone replacement treatment
  • Infertility treatment or treatment to assist reproduction
  • HIV or any other sexually transmitted diseases
  • Death within 30 days of diagnosis of critical illness or surgery
  • Pregnancy or childbirth-related critical illness
  • Any ailment developed by direct consumption of tobacco in any form, drug, or alcohol, etc.
  • Illnesses caused due to terrorism, civil war, navy or military reasons
  • Any critical illness diagnosed within the waiting period
  • Any critical illness arising due to internal or external congenital disorder.

Factors to Keep in Mind While Buying a Critical Insurance Policy

Critical illness covers offered by general and health insurance companies come in the following ways:

1 Sum Insured

The amount of cover is important to determine which policy works better for you. Treatment for some critical illnesses costs comparatively lower than the others. Knowing how much coverage you want will help you choose the right plan for your needs.

2 Standalone Critical Illness Insurance Policy or Critical Illness Insurance Rider

Though a standalone policy attracts a higher insurance premium as compared to a rider, the scope of coverage offered by a standalone critical illness insurance plan is higher as compared to a rider. Since a rider is dependent on the base policy, the amount of cover or the sum assured will be way lesser. For instance, if your basic Mediclaim is for Rs. 5 lakhs, then the critical illness rider will provide insurance coverage only up to Rs. 5 Lakh. However, in a standalone plan you can take coverage as per your requirement.

3 Sub-Limits

Checking the sub-limits under a critical illness insurance policy is important as they affect the final costs you would have to bear.

4 Inclusions and Exclusions

Checking the exact inclusions and exclusions in the policy brochure will help you get a better understanding of the plan, and you can easily decide whether the plan suits your specific illness or not.

5 Age

The critical illness insurance policies offer wider coverage but attract a higher insurance premium for higher ages. This is because at a higher age, risk of developing critical illnesses as compared to young adults are more.

6 Maximum Renewal Age

Some critical illness insurance policies provide coverage up to a specified age while others provide lifelong coverage. You must be aware of the maximum age up to which you can renew your chosen critical insurance policy.

7 Waiting Period

Generally, critical illness insurance policies come with a waiting period. This means that the policyholder can avail insurance coverage for the covered critical illnesses after the end of the waiting period. Always opt for a critical illness insurance plan with a low waiting period.

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*Standard Terms & Condition Apply. Premium discount is provided by insurer for a 3-year policy and 4 or above insured family members. CIBPL/Health/WebBanner/English/Dec-21/001