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Understanding The Benefits of Critical Illness Insurance To Tackle Life-Threatening Illnesses

By Staff

Healthcare today, in line with other items and services, has also seen leaps in costs. Thanks to the drastic changes in lifestyles in the past few years,you can never know when and how you may be afflicted with a critical or life-threatening illness. A basic health plan can provide you with coverage to meet some of the exigencies and can also offer the associated taxation benefit (as prescribed under section 80D of the Income Tax Act). But there is also a need to supplement the basic health coverage with a top-up for critical illness cover or buy a standalone critical illness insurance cover.*


* Tax benefit is subject to change in tax laws

Understanding what critical illness insurance is

Critical illness insurance covers you against the costly treatments involved in treating diseases that are life-threatening or critical, including cancer, tumours, and other similar conditions. The major benefit of having this policy is the payable benefit received when you are diagnosed with a critical illness. Some companies also have a women-focused critical illness policy that can provide coverage against conditions affecting women (including breast cancer).

Understanding The Benefits of Critical Illness Insurance

The condition for claiming the amount or the benefit under the policy is the completion of the waiting period (as specified in the insurance document). This is also called the survival period of a policy and usually lasts for 30 days.

Features of critical illness insurance

A critical illness plan is benefit-based and pays the lump sum amount with no restriction on the mobilisation of the funds. No health check-up is required in most of the plans until the age of 45 or so.


Exclusions under critical illness insurance

Conditions that are not covered by critical illness cover include some of the following:
- Critical illness arising on account of consumption of alcohol or other intoxicating substances.
- Any illness or condition not listed in the insurance document
- Conditions arising on account of pregnancy or abortion
- Mental illnesses, psychological/psychiatric disorders
-Treatment related to HIV or AIDS*

*Standard Terms and Conditions apply

Benefits of critical health cover in tackling life-threatening diseases:

1. Tax benefit: Similar to regular health insurance policies, one will be able to get the tax benefit or tax deduction as applicable under Section 80 D of the Income Tax Act. This deduction is applicable to the premium that you pay for the insurance policy. The amount of deduction available varies from time-to-time.

*Tax benefit is subject to change in tax laws

2. Combined benefit: The plan, if not bought on a standalone basis, can also be clubbed with your basic plan.This can help you get some sort of compensation for the non-payable losses. *

3. Fixed benefit cover: This fixed benefit cover in any distressing situation, such as in the event of the diagnosis of a life-threatening disease, will provide you with the full claim amount or the payable benefit as the case may be. *

4. Income replacement: A life-threatening illness or critical illness, wherein one may be rendered in a condition where he/she cannot continue working, can cause a distressing situation. In such a case, the benefit or the lump sum paid for the usual treatment costs can also come in handy and enable the insured individual to meet other daily expenses or high-end expenses ordebts.*

5. No claim bonus: In the case where claims against the critical illness cover are not made, then,similar to a health insurance policy, insurers also extend no claim bonus during the term of the policy either in the form of a discount on the premium or via an increase in the sum assured or the coverage provided by the policy.*

6. Coverage after post-diagnosis purchase: Some of the insurers may also offer the critical illness cover after the critical illness is uncovered. Therefore, the financial security against the same can be enjoyed even after the diagnosis, though it can come with a higher premium payout. *

7. Overseas treatment: The critical illness policy covers the insured for treatment in a foreign land as well.*

* Standard T&C Apply

So, while life insurance offers security to your dependents, this special critical illness cover, in the case of unwarranted circumstances, can help you get the best of treatment and avoid worrying about the financial aspect. Along with the treatment costs, some critical illness covers also serve to act as the income replacement for the insured, if he or she,because of the diagnosed condition, is not able to work and earn a living anymore.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

Read more about: insurance health
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