In this day and age, there is a continuous rise in the number of serious illnesses as a result of sedentary lifestyles, food additives, processed foods, air pollution, etc. For instance, the estimated number of cancer incidents in India in 2022 was 14,61,427. Also, 1 in 9 people is likely to develop cancer in their lifetime.
And, we all know how expensive it is to treat cancer. Cancer treatment in India costs an average of INR 5,00,000 and can go up to a maximum of INR 27,50,000.
You can count on health insurance to be a reliable source of financial assistance when you need it most. However, a regular health insurance policy only covers hospitalisation costs. What about household expenses, loan EMI, children's school fees, etc. which may also arise in case you take a break from work?
This is where critical illness insurance comes in. It is designed specifically to cover critical illnesses. Such a cover makes it easier to cope with tough times, at least financially.
What is critical illness insurance? How does it work? Is it good to have critical illness insurance?
Let’s find out -
First, What Is A Critical Illness?
Critical illness refers to illnesses or diseases impacting a vital organ that are life-threatening and irreversible. This includes heart disease, stroke, cancer, kidney failure, etc. These illnesses require expensive and long-term medical treatments.
What is a Critical Illness Insurance and How Does It Work?
Critical illness insurance is tailored primarily to protect you financially if you’re diagnosed with a critical illness listed in the policy document. This cover provides you with a lump sum amount that can be used to cover your medical expenses, such as long-term medical treatments, medical equipment for assistance, etc.
Moreover, if you are the primary breadwinner in your family, the lump sum from your policy will serve as an income replacement that can help your family cover their loan EMIs, household expenses and children’s school fees and other financial needs. You can use this amount even if you need to travel abroad for medical treatment.
Note: Please keep in mind that the policy terminates once payment is made.
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What is Covered Under Critical Illness Insurance?
The scope of coverage and the list of illnesses covered may vary across products. Some of the major ailments that are covered under a critical illness insurance policy are:
- Cancer (of specified severity based on the policy)
- Kidney failure requiring regular dialysis
- Multiple Sclerosis with persisting symptoms
- Open chest Coronary Artery Bypass Grafting (CABG)
- Major organ transplants, like liver and heart valves
- Bone marrow transplant
- Permanent paralysis of limbs
- Open heart replacement or repair of heart valves
- First heart attack (of specific severity based on the policy)
- Stroke resulting in permanent symptoms
How Does Critical Illness Insurance Differ From A Regular Individual Health Insurance Policy?
|Critical Illness Insurance Policy
|Health Insurance Policy
|It covers only those critical illnesses that are mentioned in the policy document.
|Health insurance is a comprehensive cover that provides you financial protection against hospitalisation expenses in the event of an illness, accident or injury.
|A lump sum benefit is paid upon diagnosis of a listed critical ailment, regardless of any medical expenses.
|The payout is made on the basis of medical expenses incurred and as per the policy’s T&Cs.
|After the payout is made, the policy terminates.
|Even after a claim is settled, the policy continues to offer coverage in a policy year - until it is renewed. However, if your claim amount is equal to or exceeds the sum insured in any given policy year, you will have to foot any other medical expenses yourself in that policy year.
Benefits Of Critical Illness Insurance
Here are some reasons why buying critical illness insurance is a good idea -
Provides Coverage For Medical Expenses And Other Treatment Costs
The cost of treating critical illnesses like cancer and heart disease is high. Critical illness insurance makes it easier to handle high consultation and hospitalisation expenses – so you can focus on your healing journey.
Serves As An Income Replacement
As mentioned earlier, treating these illnesses will cost you quite a bit, and your savings may suffer as well. You may have to take some time off from work to undergo the treatment process. The lack of ability to work is accompanied by a loss of income. Critical illness insurance can prove to be very useful in such situations. The payout received under critical illness insurance can help you compensate for income loss.
Assists You With Your Monthly Expenses
If you are the primary breadwinner of the family, you may have specific responsibilities and liabilities. There may be loan repayments and EMIs to pay back. Since you already suffer an income loss, this can impact your monthly expenses. With critical illness insurance, you can handle your monthly expenses without adding any additional stress.
Gives You Extra Support Along With Your Health Plan
Critical illness insurance offers you additional financial support beyond your primary health insurance policy. Upon diagnosis, there will be increased lifestyle expenses such as wheelchairs, home modifications etc. - which can be covered with the lump sum provided by the policy. It is, therefore, a good idea to have critical illness insurance in order to deal with these medical conditions and rising medical costs.
Many people believe that critical illness insurance entails exorbitant premiums and is beyond their reach. This isn't true, however. Critical illness insurance policies have now become more accessible and affordable. If you are planning to buy critical illness insurance, compare the different products available on the market, review their benefits and then zero in on the one that fulfils your expectations and is easy on the pocket.
You can claim deductions on the premiums you pay under a Critical illness insurance plan under Section 80D of the Income Tax Act.
So, Should You Buy Critical Illness Insurance?
There is a steady rise in the number of people diagnosed with a critical illness. Diseases like these can affect anyone at any age, ravaging even those in their 20s and 30s.
Maintaining a healthy lifestyle will help you be fit and healthy. On the other hand, you should also take action to safeguard yourself against critical illnesses by obtaining critical illness insurance - if you think you are at risk. For instance, if you have a family history of critical illnesses.
Your insurance portfolio should first include an individual health insurance policy, followed by a critical illness plan as a second layer of protection. This will shield you from any exorbitant and unexpected medical expenses.
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With growing cases of life-threatening diseases like heart disease, cancer, etc. having critical illness insurance can go a long way in ensuring you get the best medical treatment possible - without dipping into your savings. However, before you take the plunge and invest your hard-earned money, you need to be aware of what's covered and what's not - so you won't be caught off guard later on.