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What is Critical Illness Cover in Health Insurance?

Published On Jul 21, 2023, Updated On Jul 28, 2023

In an unpredictable world, safeguarding our health and financial well-being has become increasingly important. Critical illness cover is a type of insurance that offers financial protection in the face of severe illnesses. While life insurance provides coverage in the event of death, critical illness cover focuses on supporting individuals diagnosed with critical illnesses during their recovery. In this article, we will explore the concept of critical illness cover, its significance, coverage, benefits, and factors to consider when purchasing a critical illness health insurance policy.

Defining Critical Illness Cover

What is Critical Illness Cover in Health Insurance?

Critical illness cover, also known as critical illness insurance, is a form of protection designed to provide a lump sum payment to policyholders upon diagnosis of a specified critical illness. These illnesses typically include major medical conditions such as cancer, heart attack, stroke, organ transplantation, and multiple sclerosis, among others. The payout from the policy can be used by the insured to cover medical expenses, replace lost income during treatment, modify living arrangements, or any other purpose deemed necessary.

Significance of Critical Illness Cover:

The increasing prevalence of critical illnesses and their potential financial impact underscores the importance of having critical illness coverage. While health insurance may cover a portion of medical expenses, it often falls short when it comes to addressing the broader financial implications. Critical illness cover offers a financial safety net, ensuring that individuals and their families can focus on recovery rather than worrying about the associated costs.

Moreover, critical illnesses can result in long-term disability, making it difficult or impossible for individuals to continue working. The financial payout from a critical illness policy can provide a much-needed cushion, covering lost income and supporting ongoing financial commitments such as mortgage payments, education expenses, and daily living costs.

Coverage and Benefits of Critical Illness Cover

Critical illness policies vary in coverage and benefits, and it is crucial to carefully assess the terms and conditions before purchasing a policy. While each insurance provider may have specific offerings, common features and benefits include the following:

  1. Wide Range of Covered Illnesses: Critical illness cover typically includes a comprehensive list of critical illnesses. This list may differ among insurers, and it is important to review the policy details to ensure that it aligns with your needs.
  2. Lump Sum Payout: Upon diagnosis of a covered critical illness, the policyholder receives a lump sum payment. This payout provides flexibility in how the funds are utilised, allowing individuals to address immediate medical expenses, debt repayment, lifestyle modifications, or other financial requirements.
  3. Partial Payments: Some policies provide partial payouts for less severe conditions or early-stage diagnoses, ensuring financial support at various stages of the illness.
  4. Additional Benefits: Certain policies offer additional benefits, such as coverage for children, rehabilitation support, second medical opinion services, and access to counseling or helplines.
  5. Premium Waiver: In some cases, critical illness cover policies come with a premium waiver provision, relieving the policyholder from paying premiums while they are undergoing treatment or recovering from a critical illness.

Factors to Consider Before Buying a Critical Illness Cover

When considering critical illness cover, several factors warrant careful consideration:

  1. Coverage Amount: Determine the appropriate coverage amount by assessing your financial obligations, medical expenses, and potential income loss during treatment and recovery. Consider factors such as outstanding debts, mortgage repayments, and future financial goals.
  2. Policy Exclusions: Understand the exclusions specified by the policy, as some critical illnesses may not be covered. It is crucial to be aware of any pre-existing conditions or lifestyle choices that may affect coverage eligibility.
  3. Waiting Period: Policies often have a waiting period from the inception date before a claim can be made. Familiarise yourself with this waiting period and ensure it aligns with your specific needs.
  4. Premiums: Evaluate the premium costs associated with different policies. Premiums can vary based on factors such as age, gender, health status, and the level of coverage desired. Compare multiple insurance providers to find the most competitive rates.
  5. Policy Renewability: Check the policy's terms regarding renewability and age limits. Some policies may have restrictions on renewals after a certain age or impose higher premiums for renewals.
  6. Survival Period: The term "survival period" refers to the time frame during which an insurance benefit will only be paid if the insured person remains alive for at least 28 days after receiving the initial diagnosis of their sickness or experiencing their first illness-related medical event.

Below table explains the actual survival period and assessment period for the listed critical illnesses:

Sr no.

Types of Critical Illness

Survival Period

Min. Assessment Period



28 days

28 days


Kidney Failure (End Stage Renal Failure)

28 days

28 days


Primary Pulmonary Arterial Hypertension

28 days

28 days


Multiple Sclerosis

28 days

28 days


Major Organ Transplant

28 days

180 days


Coronary artery by-pass grafts (with surgery to divide the breastbone)

28 days

28 days


Aorta Graft Surgery

28 days

28 days


Heart Valve Surgery

28 days

28 days



28 days

90 days


Myocardial Infarction (First Heart Attack)

28 days

28 days



28 days

30 days


Total Blindness

28 days

28 days



28 days

90 days


Critical illness cover offers individuals and their families peace of mind during times of medical crisis. It provides a financial safety net by offering a lump sum payment upon diagnosis of a covered critical illness. The funds can be used to cover medical expenses, replace lost income, or maintain financial stability during recovery. Understanding the coverage, benefits, and factors to consider when purchasing critical illness cover is crucial to ensure that the policy aligns with your needs and provides the desired level of protection. By investing in critical illness cover, individuals can protect their financial well-being and focus on their recovery without the added burden of financial stress.


1. What is payable by Sum Insured in a critical illness policy?
The Sum Insured represents the most money we will ever pay the insured in a single lump sum in the case of a critical illness.

2. Which critical illnesses are covered by a critical illness policy?
Following is the list of critical illnesses covered under this policy:
A. First diagnosis of:
Cancer of Specified Severity
Kidney Failure Requiring Regular Dialysis
Primary Pulmonary Arterial Hypertension
Multiple Sclerosis with Persisting Symptoms
B. Undergoing for the first time of the following surgical procedures:
Major Organ/ Bone Marrow Transplant
Open Chest Bag
Aorta Graft Surgery
Open Heart Replacement or Repair of Heart Valves
C. Occurrence for the first time of the following medical events:
Stroke Resulting in Permanent Symptoms
First Heart Attack of Specified Severity
Coma of Specified Severity
Total blindness
Permanent Paralysis of Limbs

4. Who can buy a critical illness policy?
Anyone in the age group of 18- 65 years can buy a critical illness policy.

5. What is the waiting period under a critical illness policy?
There is a waiting period of 90 days before you can claim under this policy.

6. What are Sum Insured restrictions in a critical illness policy?
If the insured is the family member who makes the most money, the maximum amount insured would be limited to 5,000,000 or 60 months of the insured's gross income, whichever is less. In such instances, the company may insist on receiving income verification. If the insured person is not generating any money, the amount insured is limited to 50% of the maximum 10 lacs of Proposer Income. For insured individuals 60 years of age and above who are purchasing a policy for the first time, the Maximum Sum Insured would be limited to 1,500,000.


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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