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Don't Know Much About Critical Illness Insurance? Get Ready for Some Major Information

Published On Apr 12, 2019 5:30 AM By Yamini Sharma

Is the concept of critical illness cover new to you?

Had you heard of it before, but never thought it would be important for you?

Now that you are ready to explore the topic, let’s start with the basics.

So, what’s critical illness that is being discussed? Well, critical illness is a life-threatening condition, which makes an individual struggle to regain their normal lifestyle. What’s worse is that this serious health condition leaves one with a drained bank balance, which is why it is important for an individual to have critical illness cover. 

What is Critical Illness Cover?

Referred to as critical illness insurance as well, critical illness cover is a popular insurance product.

In critical illness cover, the insurer makes a lump sum payment, in case the policyholder is diagnosed with one of the illnesses mentioned in a predefined list as part of an insurance policy.

While the number of illnesses covered may vary from policy to policy, cancer, heart attack, stroke, paralysis, bypass of a coronary artery, and failure of a major organ are common to maximum covers.

Importance of Insurance for Critical Illness 

If you don’t have savings to help you, critical illness cover is a must to help you so that even if you seriously fall, you don't end up seeing your savings going down the drain. Needless to say, it is a financial protection tool that you can make the best use of to make sure the situation of crisis is handled well.

Already have a health insurance plan? Don’t think you need additional coverage? Don’t forget, critical illness calls for specialised treatment and care. Your comprehensive health plan having limitations on hospitalisation, the fees of  the doctor, etc., will not be able to cover the entire medical expense towards treatment.

In other words, health insurance is different from critical illness cover, and that too in multiple ways. So, if you don’t want to end up paying from your own pocket, go for insurance for critical illness without thinking much.

Key Features of Critical Illness Cover :

  • Meaning - It covers life-threatening diseases
  • Benefits - Does not require hospitalisation as diagnosis is enough to get critical illness benefits. The insured gets the entire amount in one go
  • Coverage - Has a restricted coverage as it only covers 6-12 diseases
  • Waiting Period - It has a waiting period of 3 months
  • Tenure - Taken for a long duration, usually 15-20 years

Benefits of Insurance for Critical Illness?

  • Offers a lump sum amount at once, if diagnosed with serious illnesses covered by the insurance policy
  • Includes cost of care and recuperation aid
  • Tax benefits under section 80D
  • Free health checkups
  • Prevents family from bearing financial burden
  • Provides peace of mind

Crucial Aspects to Look for When Choosing Critical Illness Cover :

Total ailments covered: It is one of the prime elements to consider before finalising any critical illness cover. In fact, a proper research on plans is what one should prefer before making the final choice.

  • Survival period: The survival period is basically the span of time for which the policyholder has to survive, once the critical illness is diagnosed. Typically, it is 30 days, however, some companies extend it beyond 30 days, depending on the illness.
  • Built-in coverage: The critical illness cover is the ultimate support in the trying times that involves one being diagnosed with a life-threatening disease. What makes it a boon is the element of built-in coverage that many companies provide. For instance, Personal Accident Cover, Hospital Cash, Child Education Benefit, Complementary Health Checkup, etc. are some of the built-in coverage that a few companies offer.
  • Pre-existing diseases: While some plans cover any pre-existing diseases after a waiting period of 48 months, many plans do not cover them at all. Therefore, it is important to assess what all comes under the covered aspect in pre-existing clause.
  • Free look: Many insurance companies offer a period of 15 days (free-look period) to review their decision. During this time, if an individual finds the plan unsuitable for them, they can get it canceled and request for refund. So, this is an element you should look for when making a choice.
  • Tax benefit: In accordance with current rates of Income Tax Act, 1961 (u/s 80D), one can avail the tax benefit on the premium you pay towards the premium. Make sure you do not neglect this element at any cost.

The Critical Illness Cover Claim Process:

Claiming process plays a crucial role in the choice of critical illness cover.

The claiming process in a particular company is also what one should take into account so that they don’t have any doubt in mind at the last moment. That said, let’s explore what all you need to possess or do to file your claim.

When filing a claim, get in touch with the insurance company and register the claim.

The List of Documents Required comprises:

  • Duly filled claim form
  • Photocopy of ID card
  • Medical certificate confirming the diagnosis of critical illness
  • Discharge summary

So, whether you have crossed the age of 40 years, possess a history of critical illness in your family, or are in a high-pressure job, don’t think twice. Opt for critical illness cover right away!

Also Read

11 Things to Consider When Comparing Critical Illness Insurance Plans

Why is it crucial to have a critical illness plan?

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