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Benefits of Critical Illness Insurance

Lifelong Renewal

Most critical illness policies offer lifelong renewability. There is no maximum ceasing age, hence one can buy the policy from 8 years to 65 years depending upon the insurer.

Flexible Payout

Critical Illness insurance offers flexible payment options upon diagnosis, such as the lump-sum payment of sum insured or lump-sum payment plus 10% of sum insured paid each year for the subsequent 5 years.

Affordable Premium

The critical illness insurance premium is cheap as compared to health insurance. This is because the insurance will only trigger upon the diagnosis of critical ailments which are covered by the policy.

Tax deductible

The premium paid for the critical illness insurance policy is tax deductible upto Rs.15000 under section 80D of the Income Tax Act. Also, the payout under the policy will be tax-free.

Quick guide to Critical Illness Insurance

What is Critical Illness Insurance Policy

Critical illness insurance, also known as critical illness policy cover, is an insurance product in which the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the dreaded diseases on a pre-determined list as part of an insurance policy. Life threatening diseases like renal failure, heart attack, cancer, organ transplants, etc. are covered under critical illness policy.

Through critical illness rider an insurance policyholder can avail an additional coverage in exchange of additional premium. The policy may also be structured to provide regular payouts to the policyholder undergoing a surgical procedure, for example, having a heart bypass operation. The survival period - The policy may require the policyholder to survive a minimum number of days from when the illness was first diagnosed. The period varies from company to company, 14 days being most typical survival period used.

Importance of Critical Illness Insurance

Security against Healthcare inflation

Critical illnesses do not only put strain on the body, but on the finances as well. With progress in the medical infrastructure, the medical cost is increasing too. It’s therefore important to be prepared for it even when there’s a faint possibility of a diagnosis.

Cover against Critical Illness

Critical illness insurance covers a specified list of life-threatening ailments. It is totally worth it, if you have a family history of these ailments. Affordable premiums, you can help provide yourself with peace of mind and financial protection if an emergency were to strike.

It can be taken to seek financial security in the event of an unexpected, serious, and extended illness affects you. With medical inflation on the rise, having a critical illness policy is necessary to safeguard against inflated hospitalisation charges.

Features of Critical Illness Insurance Plans

Key Features:

Critical Illness policy generally contains the following significant features:

  • Comprehensive Coverage - Policy provide coverage to more than 32 illnesses including Cancer, stroke, end-stage renal failure and heart failure. Affordable rates provide policyholder with peace of mind and financial protection, if an emergency were to strike.
  • Affordable Premium - Comprehensive coverage is provided with affordable premium, without putting a strain on your finances.
  • Quick Claim Settlements - Hassle-free claim settlements that provides timely financial assistance to you if a hospitalization claim is paid.
  • Customer Service - Customer service is available 24 hours a day, 7 days a week. Cashless 
  • Claim Facility - You can avail of cashless claim facility at across numerous healthcare providers in the country.

Group most benefited by Critical Illness Insurance

Following are some key factors considerations that you should keep in mind:

  • Individuals with a history of critical Illness in their family - When you have a history of critical illnesses in the family, the possibility of you getting diagnosed is high too. Therefore, you must consider your family’s medical history when you are buying a basic insurance policy.
  • Primary or Sole Breadwinners - If you are the primary breadwinner of the family, health costs are not the only expenditure that your family expects you to incur. Therefore, it’s highly recommended that you go for a critical illness insurance policy to maximise your health cover.
  • Those engaged in high-pressure Jobs - Most individuals don’t realize it, but stress is the leading cause of multiple health issues. Stress can cause or aggravate heart issues. Therefore, it’s suggested that you consider buying critical illness policy.
  • People over the Age of 40 Years - With age, comes health issues. So, even when you are in the best of your health, when in 40s, you must consider buying a critical illness insurance rider.
  • Women - The increasing cases of cancer in women are alarmingly high. Thus, buying a critical illness insurance is advisable if you are prone to such risks.

Advantages of Critical Illness Insurance Plans

A critical illness insurance plan can be purchased at a comparatively lower premium than a regular health insurance policy (Individual or Family Floater). Reason being, where a typical health plan covers multiple diseases, a critical illness insurance plan is only for the specific medical conditions.

  • Security against Healthcare inflation
  • Cover against Critical Illness
  • Covers mental health

A critical illness insurance policy offers coverage against life-threatening critical diseases like renal failure, heart attack, cancer, organ transplants, coma, etc. These policies offer one-time lump-sum coverage against the exorbitant cost associated with treating these diseases.

Alternatives to Critical Illness Insurance Policy

Experts having a good inside knowledge of insurance point out that there are alternative forms of coverage without all these restrictions of critical illness policy. For example,

  • Disability insurance - This provides income when you can’t work for medical reasons, and this financial protection isn’t limited to a narrow set of illnesses. This is especially a good option for anyone whose earnings would take a significant hit by a prolonged period of absence from work.
  • Employer-sponsored health plans - The term refers to health insurance obtained through an employer. Employer-sponsored coverage includes not only insurance for current employees but their families too.
  • Health Savings Plan -Individuals can also build a separate savings account to cover non-medical outlays that could arise if they have cancer, for example, and have taken leave from your job.

Tax Benefits under a Critical Illness Insurance Policy

In addition to providing you a financial relief during health emergencies, the policy also offers tax benefits. Amount paid against policy premium for critical illness insurance policy is deductible under Section 80D of the Income Tax Act of 1961. Below are the tax benefits basis the age:

  • Individuals under the age 60 can claim a tax deduction of up to Rs. 25,000/year for their spouse and children.
  • Those above the age 60, a maximum of Rs 50,000 is authorized to maintain a health insurance policy or medical treatment.
  • One can also claim a deduction for the premium paid on behalf of their parents. If individual is below the age of 60, the upper limit for the tax benefit is Rs 25,000. The threshold is Rs. 75,000 for parents over the age of 60. So, under Section 80D, if you pay a premium for your entire family, you can save up to Rs. 75,000 on your taxes. If you are over 60 years of age and pay your parents' premium, you are eligible for a maximum deduction of Rs.1 lakh.

Selecting an ideal Critical Illness Insurance Plan

Like any other insurance policy, you need to take into account a number of factors when choosing the right insurance plan for critical illness. Below checklist can help you purchase the best critical illness insurance in India:

  • Check the Coverage Amount -The payout should be sufficient to assist you financially in the event of an illness. This decision can be made based on your savings and an overall financial situation.
  • Calculate Premium Rates -Most buyers shortlist critical illness policies based solely on the premium rates, which is understandable. They can use an online premium calculator to get a critical illness insurance quote online.
  • Exclusions and Limitations - All critical insurances come with exclusions and limitations. It is important to read the fine print so that you are aware of what specifically is not covered in your policy.
  • Deductibles and Co-Payments - Deductibles and co-payments option is available in most critical illness policies. One should compare the deductibles and co-payments of different policies before purchasing one.
  • Ensure Less Waiting Period - Critical Illness plans, like any other health insurance plans, include a waiting period clause. There is a standard waiting period of 90 days (as an initial waiting period) and 48 months for pre-existing diseases.
  • Find Out the Covered Illnesses - It is crucial to know what all diseases are covered under the critical illness policy when purchasing a policy. This is especially important if you are purchasing the policy because you have a family history of a medical condition.
  • Learn About Renewal Policy - When it comes to renewability, these plans generally put an age limit. One should select a plan with a longer age limit so that policy holder can be renew it without hassle, at any stage of life. Also, it is important to closely monitor claim related aspects like the claim intimation process, sub-limits for surgery, diagnostic tests, and other procedures.

Critical Illness Insurance Plan vs. Health Insurance Plan

Coverage - Critical Illness policy covers hospitalization against over 32 life-threatening critical illnesses. A health insurance covers different types of chronic diseases requiring standard hospitalization and treatment expenses.

Benefits - Critical Illness policy provides benefits of Pre and post-hospitalization, organ donor cover, dialysis cover, psychiatric counselling, etc. Health Insurance only covers In-patient hospitalization, pre and post-hospitalization, daycare treatments, ICU charges, etc.

Survival Period - Critical Illness policy requires the insured person to survive for a period, of say 30 days after the first diagnosis of the illness. The time frame may vary from one insurer to another. There is no survival period in a health insurance.

Waiting Period - For Critical illness Insurance, there is a 90 days initial waiting period (48 months for pre-existing diseases). A health insurance policyholder has a 30 days initial waiting period and 48 months for pre-existing diseases.

Policy Period - As opposed to Critical Illness Insurance, which are long-term policy, Health insurance can be annual or long-term.

Illnesses Covered under Critical Illness Insurance Plans

Not all policies are created equal, so it is important to do a comparative analysis of different critical illness policies from different insurers. It is important to find one that meets your medical needs and budget. List of some common critical diseases against which a critical illness policy usually provides coverage are mentioned below:

Cancer (up to a specified stage) Major burns
Heart attack Brain surgery
Stroke Blindness
Kidney failure Apallic syndrome
Coma Good pasture’s syndrome
Organ transplant Open heart replacement or repair of heart valve
Bone marrow transplant Benign brain tumour
Loss of speech Open chest CABG
Deafness Alzheimer's disease
Paralysis Primary Parkinson's disease

Some other important benefits included in the plan:

  • Chemotherapy and Radiotherapy
  • In-patient Hospitalization
  • Pre and Post hospitalization
  • Dialysis Coverage
  • No Claim Bonus
  • Healthcare Services
  • Ambulance Cover

Critical Illness Insurance - Inclusions and Exclusions

Critical illness insurance coverage will not cover if your medical condition isn't serious. There are a few situations (listed below), where critical illness insurance doesn't provide any support.

  • No coverage for dental care or cosmetic surgery
  • Critical Illness or other medical condition not specified in the policy documents
  • Hormone replacement treatment and related expenses
  • Infertility treatment
  • Sexually transmitted diseases (STDs)
  • Critical illness developing due to consumption of tobacco, smoking, drug intake, or alcohol, etc.
  • Illnesses caused due to terrorism, civil war, or military conflicts  
  • Critical illness diagnosed within the waiting period
  • Critical illness arising due to congenital disorder, both internal or external
  • Self-inflicted injury, attempted suicide or suicide
  • Illness or injuries caused due to any breach of law or any criminal intent by the insured
  • Pregnancy, miscarriage, childbirth, maternity including C- section, abortion, or complications resultant of any of these
  • Damage caused by a nuclear, chemical or biological warfare
  • All the hazardous activities

To avoid disappointed with their insurance plan because of misinformation about the policy coverage limits, it is advisable for policy buyers to carefully go through the exclusions of policy plan.

Why Buy Critical Illness Insurance Policy Online from SecureNow?

SecureNow is an independent online broker for critical illness cover – which means we're here to help you make the right decisions when protecting yourself and your family in case of illness. When you use our service online, offline or over the phone, you get:

  • Free, independent, regulated advice about exactly what you need in a policy
  • Help choosing the right critical policy and insurer for you from the whole market
  • Peace of mind that you're investing in the right thing when buying cover

SecureNow, offers a comprehensive and cost-effective critical illness insurance plan that can be very helpful in case of an unlikely health emergency. It scrutinize the key points of Critical Illness Insurance Plan and suggest best Critical Illness Policy for you. Though SecureNow, a critical illness insurance plan can be purchased at a comparatively lower premium. With these affordable rates, you can help provide yourself, peace of mind and financial protection if an emergency were to strike.

Critical Illness Insurance Policy FAQ’s

Not all insurance companies provide the same type of coverage against critical illnesses in their plans. Most critical illness policies as a standard will include cancer, heart attack and stroke. Some Critical illnesses policies cover as many as 40 life-threatening illnesses. It is therefore important to read the wordings set out in the policy document and choose a plan that covers the specific critical illness you expect yourself prone to be diagnosed with. Ideally, one should go with a critical insurance policy that covers maximum diseases.
Critical illness claims are the plans that provide a level of financial stability if you become Critical ill. Critical Illness insurance policy provides additional coverage for medical emergencies, which often incur greater-than-average medical costs. These policies pay out cash to help cover cost overruns when traditional health insurance may fall short.
Buyers can opt for the critical illness plan at the same premium rates while purchasing basic life insurance plan. There are many insurance providers who offer critical illness cover as an option or add-on to their life insurance product. While few other Insurers also provides an additional cover against permanent and total disability.
Yes, buying a critical illness cover is advantageous in the following ways
  • The policy coverage acts as a safety net, protecting you in the most significant manner possible. It can covers 40 critical illnesses.
  • Insured have extensive financial protection for hospitalization and advanced medical procedures, such as chemotherapy and radiotherapy.
  • Because this indemnity-based plan covers numerous medical expenses incurred throughout the year, a high sum insured provides you with total peace of mind.
  • Yes, term insurance covers critical illnesses. Individual can add a critical illness benefit on top of his/her base plan at an additional cost and be financially protected against the multiple critical illnesses that are covered under the policy, which as standard will include cancer, heart attack and stroke.
  • The minimum entry age to purchase the critical illness insurance and disability insurance rider is 18 years.
  • While the maximum age of adding critical illness cover is 65 years, the maximum maturity age varies as per the critical illness coverage option selected.
  • You must also have a basic insurance policy, which you can top-up by buying the critical illness rider.
  • You may need to pass the medical tests, as mandated by the insurer.
  • Critical Illness Insurance Policy Articles

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