Why do You Need a Critical Illness Cover

Nov 18, 2017 | 2 years ago | Read Time: 3 minutes | By iKnowledge Team

The treatment of these diseases range anywhere from INR 3.5 lakh to INR 20 lakh and more. This is precisely the reason why, apart from having a healthy diet and exercise, one has to be financially prepared if plagued by any of these illnesses. A great way to secure your health is by getting yourself a critical illness cover or a medical insurance plan. This will not only help arrange funds in troubled times but also allow you to have access to quality healthcare and support.

Why buy a critical insurance plan?

Although a medical insurance plan covers a broad range of illnesses, in cases of a critical illness, nothing works better than a critical illness policy. This is because a critical illness is far more expensive to treat than most other illnesses.

Why Having a Critical Illness Insurance Policy Is Important? - Aegon Life Blog

When one is struck with a critical illness, apart from their physical and emotional strength, their financial strength is also tested. During such times, the family’s income suffers. Expenses like Equated Monthly Instalments (EMIs) may add to this. This is where a critical illness plan comes in handy. It acts as an income supplement, thereby ensuring that along with your treatment, your children’s study needs, mortgages, and other such expenses can be taken care of. Apart from this, some of the other benefits of a critical illness insurance plan are:

  • Cover miscellaneous expenses

A critical illness cover takes care of miscellaneous expenses like regular hospital visits and home-care services, among others. These are likely to occur when a critical illness strikes.

  • Great option for sole earning members

A critical illness policy is especially useful for those who are sole earning members of the family. It offers financial support to your family when they need it the most. 

  • Lower premiums

Unlike a medical insurance plan, the premiums towards a critical illness insurance policy are often lower. 

  • Tax benefits

All premiums paid towards a critical insurance policy are exempted from tax as per Section 80C of the Income Tax Act. 

How does critical illness insurance work? 

Unlike a regular health plan, a critical illness cover doesn’t need you to be hospitalised in order to be eligible for reimbursements. A critical insurance plan pays the insured a lump sum amount if he/she is diagnosed with a critical illness, whether or not the insured undergoes any treatment. However, the insurance provider will only pay you this amount if the illness you are suffering from is pre-specified under the terms and conditions of the policy.

Here are three important things you need know about a critical illness insurance plan.

  1. What illnesses are covered?

Some of the critical illnesses covered by insurance providers are:

  • Paralysis
  • Cancer
  • Heart attack
  • Coronary artery bypass graft (CABG)
  • Transplant of organs like pancreas, liver, heart and lungs
  • Stroke
  • Kidney failure 

2. How much coverage do you need?

While different critical illness insurance plans come with different coverage amounts, it is best to select your coverage amount keeping in mind your medical history. Also, doing your groundwork and comparing different quotes from different insurance providers is a wise thing to do.

3. What is waiting period?

All critical illness policies have a pre-specified waiting period. This is the period from the purchase date of the policy till when the policy benefits commence. Most critical illness insurance plans have a waiting period of three to six months, after which a pre-specified illness is covered. It is best to select a critical illness cover that has a short waiting period.

Life is uncertain and you never know when a medical emergency might strike. Investing in a critical illness insurance plan is the best way forward as it ensures your finances do not suffer in case of a medical emergency.

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