Critical Illness Cover - What you need to know?

With a rise in the number of lifestyle diseases and the cost of health care services, it's not surprising that health insurance is no longer a luxury but a necessity for all. With our current sedentary lifestyle, the prevalence of lifestyle diseases amidst the younger generation is significant. There is an obvious solution in sight to prevent cancer or cardiovascular ailments in younger people. The simple and easy solution is to exercise daily, avoid smoking and drinking, and to maintain a healthy diet.

Even with an active lifestyle, the chances of an individual developing a lifestyle disease due to hereditary reasons or aging is higher. Lifestyle diseases are not only life-threatening but also expensive in terms of medical treatments. Your basic health cover may not be sufficient to cover treatments related to critical illnesses. Keeping this in mind, health insurance companies are offering an exclusive health cover called the Critical Illness (CI) Cover as an add-on or rider to cover medical expenses incurred from treatments related to specified critical illnesses.

What is a Critical Illness Cover?

Unlike a mediclaim policy, a critical illness cover pays a lump sum amount to the insured person if he or she is diagnosed with any of the critical illnesses specified under the policy. The lump sum benefit can be used to pay hospitalisation, treatment, medicines, and recuperation costs. Whether the insured member is hospitalised or not, full sum insured will be paid by the insurance company upon diagnosis of a critical illness covered under the plan during the policy term. Thus, a critical illness cover is a fixed-benefit plan, unlike a mediclaim policy which works on the principle of indemnity.

What is covered under a Critical Illness Plan?

In India, health insurance providers offer Critical Illness Plans that cover 8 to 20 major critical illnesses such as cancer of specified severity, first heart attack, major organ transplant, kidney failure, stroke, etc. The Sum Insured of a CI plan is upwards of Rs.1 lakh. In addition to racking up medical bills, a critical illness patient will also experience a decrease in earning potential. Therefore, choose a critical illness cover with a higher-sum insured. When choosing the sum insured, it is advisable to look at your age, family medical history, occupation, and more importantly, medical inflation.

Waiting period of a Critical Illness Cover

Critical Illness Cover comes with an initial waiting period of 90 days from the date of policy inception. The insured member has to be diagnosed after the completion of the initial waiting period to make a claim. Also, the insured member has to survive the critical illness for 30 days from the date of diagnosis in order to make a claim. If the insured member is diagnosed before the completion of the waiting period, he or she will not be covered under the chosen critical illness cover.

How to get Critical Illness Cover?

Life insurance and non-life insurance companies offer critical illness riders. Even there are term plans with critical illness benefits. However, to add a critical illness cover to your base health insurance policy, you can purchase a CI plan from a non-life insurance company. All standalone health insurance companies and general insurance companies offer critical illness covers, click here for more.

In the case of a life insurance, a critical illness rider can be either added to the base plan or treated as an individual plan. As the premium remains constant in a life insurance policy, the overall cost will be lower. As a standalone policy, the premium can change as the insured member grows older. However, with a standalone policy, you have the flexibility to choose a higher sum insured.

Critical Illness Cover from a health insurer can be bought as an individual plan or a family floater plan. The term or duration of a critical illness plan offered by a health insurance company is lower than a life insurance company.

Things to keep in mind when buying a Critical Illness Cover

• Critical Illness Cover can be bought online without undergoing a medical test. Visit an online comparison portal to compare various critical illness plans offered by top insurance providers in India. You can compare costs, coverage, waiting period, and exclusions of each CI plan and select one that best suits your needs.
• When choosing a critical illness cover, look out for exclusions. Not all ailments are covered under a critical illness plan like the early stages of cancer or a minor heart ailment.
• Critical illnesses brought about by a pre-existing medical condition will not be covered under the CI plan. Therefore, be honest about your medical condition when purchasing a Critical Illness Cover.

Tax Benefits

Critical Illness Cover offers tax benefits up to Rs.25,000 for individuals below 60 years of age under Section 80D of the Income Tax Act, 1961. For individuals aged 60 and above, the tax benefit is up to Rs.30,000.

Why do you need Critical Illness Cover?

Basically, a Critical Illness Cover gives you peace of mind and much needed financial protection in your hour of need. As it doesn't cover hospitalisation costs of other illnesses, you can also look into getting an indemnity plan. In conclusion, adequate health cover is required to get timely healthcare services and remain financially sound in the current medical climate.