Knowledge Centre

Why Should You Include Critical Illness Insurance In Your Health Insurance Portfolio ?

In those two minutes that you will take to read this article, four people under the age of 50 will die of heart attack. By the time the day is over, 1,300 people would have been diagnosed with cancer.

We have not exaggerated these figures, and they are the reality of today’s life. In the race to get a promotion at the office by grabbing boss’ attention and staying ahead of colleagues, our health has taken a backseat. Further, our unhealthy lifestyle coupled with smoking, obesity, stress, unhealthy food habits, lack of exercise, etc.has deteriorated the situation.

Due to the sedentary lifestyle, even younger people are suffering from life-threatening diseases or critical ailments. According to insurance estimates, 40% of heart patients in India belong to the age group of 25-35 years.

The cases of critical illnesses like cancer, lung diseases, and other chronic health ailments are rising which are not only costly to treat but also lead to a financial loss in case the breadwinner of a family is diagnosed with a problem. Something similar happened to Rahul who was diagnosed with a throat cancer.

According to doctors, only surgery and chemotherapy would see him pass through the ailment. But the rude shock was a hefty medical bill which burnt a hole in his pocket despite being covered under the corporate health insurance. Along with this, the disease took a toll on his productivity and he also lost his job.

There are many people like Rahul who end up paying medical bills from their pocket in the absence of individual health insurance policies. Also, those who do have a health insurance are not adequately covered as the regular health insurance policy only takes care of hospitalization costs. What about household expenses, loan EMI, children school fees, which may also arise in case the patient takes a break from work? Here, a critical illness insurance policy helps.

What is a critical illness insurance policy?

Unlike a regular individual health insurance policy that covers hospitalization expenses, a Critical Illness Insurance Policy pays a fixed amount if you are diagnosed with any of the critical ailments as mentioned in the policy document. Kicking into action soon after the diagnosis of the health issue, the lump sum amount can be used to meet household expenses and other expenditure on diagnostic test and treatment. The policy lapses once the payment is made.

What is covered under the policy?

    Though standard ailments covered under the policy vary from one policy to another, some of the major ailments which are covered under all policies are: 
  • Heart Attack (Myocardial Infarction)

  • Stroke

  • Kidney failure

  • Cancer

  • Major organ transplantation

  • Major organ transplantation

  • Paralysis

  • Primary Pulmonary Arterial Hypertension

  • Benign Brain Tumour.

  • Alzheimer's disease

  • End Stage Liver Disease

  • Multiple Sclerosis Aorta Graft Surgery Multiple Sclerosis

  • Aorta Graft Surgery

How is regular individual health insurance policy different from critical illness policy?

Regular Individual Health Insurance Policy

It covers diseases or injury as long as it is mentioned in the policy document. The policy covers only those medical expenses which are incurred in India. The payout is made on the basis of medical expenses incurred. The policy continues to offer coverage even after claim is paid, till the renewal

Critical Illness Policy

It covers critical illnesses only, as mentioned in the policy. The policy pays a lump sum on diagnosis of a critical illness, irrespective of the fact that whether the treatment takes place in the country or not. A lump sum benefit is paid on diagnosis of a critical ailment, irrespective of the medical expenses incurred. The policy ceases to exist once the benefit is paid out

Benefits of critical illness policy

  • It acts as an income replacement: Critical ailments not only affect the person physically; it also has a major impact on the finances of the family. A critical insurance pays a lump sum amount which can be used to cover medical and household expenses.
  • It gives tax benefits: Critical illness payout is tax-free under Section 80D of the Income Tax Act.
  • It gives peace of mind: The policy gives peace of mind as now one can concentrate more on medical treatment rather than running around to arrange funds for medical and household expenses.
  • It covers treatment taking place in a foreign country: Under a critical illness insurance plan, a fixed sum is paid on the diagnosis of a critical ailment, irrespective of whether the treatment takes place in India or abroad. It means the policy can help you if you want to go abroad for further medical treatment.

How does critical illness insurance work?

The policy acts on a simple principle— if you are diagnosed with any of the covered critical illness, the insurer will pay the sum insured as a lump sum amount. Apart from paying hospitalization expenses, the amount can be used to pay loan EMI, household expenses, children school fees, etc

Even if you want to go abroad for further medical treatment, you can do so with the help of this amount. Overall, this amount acts as an income replacement and thus, can be used in a way you want.

How much sum insured should one take?

There are a few things that are more frightening than battling critical ailments. One is not having sufficient funds. There is no standard rule to decide how much sum insured one should take, but one should decide the cover as per age, income, and lifestyle.

However, because it is a one-time benefit that is paid out to the policyholder on the first diagnosis after a survival period of 1 month, it makes sense to buy at least Rs 10 lakh coverage if you are above 35 years of age. People belonging to higher age group and income bracket should certainly go for a higher cover.

Go for it!

Our lifestyle is itself the cause of most of the life threatening ailments. So if you feel you are vulnerable too, it is time for you to buy the best critical illness insurance plan and stay protected against a number of critical ailments.

However, it doesn’t mean you can avoid the individual health insurance policy. In fact, first you should buy an individual health insurance policy and then, include the critical illness plan as a second layer of protection in your insurance portfolio.

To know more about our Critical Illness Insurance Plans and its benefits CLICK HERE 

Awards & Recognition