All About Critical Illness Insurance Plan

In the purview of the sedentary lifestyle that people are living, more and more people are at risk of falling prey to lifestyle-related diseases. According to several domestic and global research organisations, one out of four Indians is at the risk of dying from diseases like cancer or cardiovascular ailments before the age of 70.

Maintaining a healthy diet and following an exercise regime regularly can help you prevent unwanted ailments. But, some of the diseases like cancer can occur due to hereditary reasons. The treatment cost for such ailments are usually expensive, and it can drain your finances quickly. Having a critical illness cover can be helpful in such circumstances.

If you have a health insurance cover, buying a critical illness health insurance plan can provide you with an additional financial buffer against the treatment of critical illnesses. Usually, people tend to invest in critical health insurance when they are 40 years old or above. But, experts suggest that you must buy a critical illness plan while you are still young as the health risks are less and you get the protection at a lower premium.

How does critical illness (CI) plan works?

The CI works differently than the general health insurance policy. In CI, the insurance company pays a lump sum amount, which is equal to the sum assured of your policy. If the policyholder is diagnosed with any critical illness like stroke or cancer, the insurance company pays the lump sum amount, irrespective of the treatment cost. You can use the amount for the treatment, post-treatment care and even pay off the debts (if any). The CI plans are, therefore, termed as defined-benefit plan where the payout is fixed and defined.

What is covered under the CI plan?

Typically, most insurance companies in India cover about 8 to 25 critical illnesses under their plan; the number of illnesses covered by insurers may vary. Some of the common illnesses covered under the plan include –

  • Cancer.
  • Heart attack.
  • Stroke.
  • Major organ transplant.
  • Paralysis.
  • Kidney failure.
  • Major burns.
  • Loss of speech.
  • Bone marrow transplant.

What are the exclusions under critical illness health insurance?

Typically, most insurance companies do not provide coverage for:

  • Any critical developed due to smoking, drug intake or alcoholism.
  • Illness caused due to military operation, terrorism, and civil war.
  • Hormone replacement treatment.
  • Cosmetic and dental care surgery.
  • Treatment received outside the geographical boundaries of India.
  • Critical conditions related to pregnancy

How much should be the sum assured for Critical Illness policy?

In the purview of the rising medical costs, the treatment for critical illness can run into lakhs. Without a sufficient insurance cover, you may have to either borrow money or break your savings. Additionally, some of the chronic diseases may affect your earning potential. Hence, it is paramount that you buy a CI plan with sufficient sum assured that would cover your treatment cost as well as help you take care of the rehabilitation. Experts recommend that you must buy a critical illness policy with a sum assured that is at least ten times more than the current annual income.

Benefits of Critical Illness Health Insurance

With the hospitals relying on high-tech equipment and super-speciality machines, the treatment is getting better every day. Also, this has given rise to medical inflation, and the treatment has become expensive. The CI plan can help you bear the treatment cost and get the best medical facility. Some of the other benefits of the CI plan includes –

  • Ideal for people with the CI medical history

A lot of critical illnesses are hereditary, which means it is passed from generation to generation. If your family has a history of critical illness, the chances are high that you may develop a CI. To ensure protection from the same, you must buy a CI plan and protect your dependants from the financial liability.

  • Protects your family member

If you are the sole breadwinner of your family, and if something happens to you, your family’s financial future will be affected severely. Critical illness insurance plans can keep your family protected from facing an unpleasant financial situation, even in your absence.

  • Tax benefit

Another benefit of CI plan is that the premium you pay towards the policy is eligible for tax deduction under Section 80(D) of the Indian Tax Act. However, saving taxes should not be your motive to buy critical health insurance, but you must purchase the CI plan to keep your family safe and secured.

  • Easy claim process

Most people have the notion that the process to file an insurance claim is complicated. However, with the critical illness health insurance plan, you can be sure that the process is simple. Most insurance companies in India have a minimal documentation process for filing a claim. You can easily fill a claim form online, and once the surveyor inspects the condition, the amount is disbursed immediately.

  • Plenty of options

Most insurers provide policyholders with the flexibility to choose the policy tenure, the sum assured and the premium amount. Based on your medical condition, family history, type of job, and income, you can choose the sum assured that would cover all your needs. Also, you can use the online insurance premium calculator to know precisely the premium amount you can afford and choose the plan accordingly.

The advantages of a critical health insurance plan are many. But, no matter if you buy the best critical illness plan, it is paramount that you carefully read the policy documents and understand the inclusions, exclusions and terms and conditions before you sign the policy. Critical illness insurance is a great way to protect your family from financial liabilities.

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