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Find Out How Much Critical Illness Cover You Need

Published On Mar 15, 2021 5:30 AM By Sakshi Aggarwal

Critical illnesses refer to chronic, life-threatening, and deadly diseases that have a low rate of prevention and can be the cause of a person’s death. It can be the outcome of our genetic history, lifestyle choices, an underlying medical condition, or an accident. Whatever the cause, it is extremely important for us to have a critical illness cover as the costs of treatment are sky high and it can lead to a tight financial crunch. Health and life insurance policies these days have certain inbuilt features as part of general insurance plans and also offer specialized plans to cover critical illnesses alone.

Many people are not sure how to decide the amount of their critical illness cover. Sometimes, they go for a higher sum assured amount, but they might not be aware that it can have a lower fraction of coverage option, intended solely for financing critical illnesses. In this article, we are going to look at a few points that will help to understand and ascertain exactly how much critical illness coverage you need. Let’s find out from the pointers below.

Factors To Consider While Deciding the Sum Insured For Critical Illness Cover

Following are some of the important factors which you should keep in mind while choosing the sum insured for your critical illness health insurance plan -

1. Consider Your Age

As our susceptibility to certain illnesses and disorders increases with our age, it is likely that we have to pay a higher premium as we turn older given the decreasing ratio of our life expectancy years. Therefore, it should be borne in mind that going for a critical illness cover at ages nearing 60 years will be more costly and difficult to obtain. In these cases, it is advisable that you should ride out a few years and then directly settle for a senior citizen insurance policy as that would be more affordable and come with greater benefits in addition to critical illness benefits.

2. Consider Inflation

Predicted or foreseeable inflation in the economy should most positively affect the amount of critical illness cover that you choose. If protecting your dependents from financial insolvency is your prime objective then you should go for a higher critical sum assured. While this means that your monthly premium amounts will also increase, the lump sum payout that you receive would not be worthless given the rise in the cost of living in the future. In these circumstances, selecting a level cover under a critical illness policy is a good choice as it ensures that your monthly coverage amount remains the same and your payouts would not decrease over time.

3. Coverage Should Not Be Equal To Life Insurance

The amount of money that you decide for your critical illness cover should ideally not be equal to your life insurance amount. Unlike life insurance, a critical illness cover will not cover for your payments in your absence, it will only aid you with financial coverage in the process of your treatment and recovery from a deadly disease. Life insurance provides financial stability to your loved ones when you are not there and so, while deciding for a high critical illness cover, it is not necessary to have a coverage amount as high as your life insurance. It should fit realistically into your medical and financial requirements.

4. All Major Diseases Should Be Covered

While settling for a critical illness cover you should take into consideration the fact that it comes with medical coverage of all major diseases. The treatment and recovery costs of critical illnesses such as cancer, stroke, respiratory disorder, tumor, and cardiovascular disorders are extremely high and many people have to stop their treatment in between for being unable to provide their medical expenses. Hence, the critical illness cover that you choose should be sufficiently comprehensive and adequate enough to offer financial coverage against all major diseases.

5. Consider Your Savings and Liquid Assets

In some cases, the treatment costs of critical illnesses such as cancer get so expensive that people often have to use their long-term investments or other assets to pay for recovery. The whole point of having a critical illness cover is to reduce your personal financial strain and use the money from the insurance company to pay for all of your medical expenses. While choosing a critical illness cover, you should be mindful of the assets that you have so that the money that is promised to you for medical treatment is sufficient for you to not liquefy your assets or property. If there are no assets, it is probably wise to go for the highest possible cover to secure yourself from financial insolvency.

These are the ways by which you can discover exactly how much critical illness coverage you need. It is not a wise option to settle for extremely high coverage amounts that will cease to help you once your policy is terminated but to select a cover option that will really help you with your medical finances. Hopefully, you will take the above points into consideration while deciding upon a health plan or a critical illness cover.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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