Benefits of critical illness insurance plan
Critical illness insurance provides financial protection by paying a lump sum upon diagnosis of serious conditions like cancer, heart attack, or stroke. This coverage helps cover medical expenses, rehabilitation costs, and loss of income during recovery, offering peace of mind and financial stability during challenging times.
1. Coverage beyond hospitalisation
Standard mediclaim policies typically cover critical illnesses only for expenses incurred during hospitalisation. Reimbursement is limited to the costs associated with in-patient treatment. Conversely, critical illness insurance plans offer a lump-sum payment upon diagnosis of a covered critical illness. This benefit can be utilised for healthcare expenses, regardless of whether hospitalization is required.
2. Secures financial future
A critical illness diagnosis often impacts a patient's ability to maintain their previous income level due to potential physical limitations. Simultaneously, the financial burden of medical treatment increases significantly. Critical illness insurance provides a financial safeguard for families. The lump-sum payout can be used to cover medical expenses, as well as everyday living costs, ensuring financial stability during a challenging time.
3. Rising medical inflation
Advancements in medical technology, including substantial investments in specialised equipment by hospitals, have improved treatment outcomes. However, this progress, coupled with general medical inflation, has driven up the cost of healthcare, particularly for hospitalisations.
For instance, the cost of Herceptin, a medication used in breast cancer treatment, ranges from Rs. 15,000 to Rs. 54,000 per vial. Treatment often requires approximately 16 vials. Consequently, patients may incur medication expenses between Rs. 2.5 lakh and Rs. 8.6 lakh during their course of treatment.
Inclusions of critical illness insurance policy
Here are the standard inclusions under critical illness policy:
- Critical illness health insurance mainly covers up to 50 major critical illnesses. These include coronary artery bypass surgery, stroke, kidney failure, major heart conditions, major organ transplant, and more.
- The critical illness cover amount varies depending upon the insurance provider.
- You can avail the coverage offered in critical illness insurance within 30 days of diagnosis. However, this may vary from insurer to insurer.
- The insured gets the lump-sum amount as mentioned in the critical illness policy.
- The critical illness insurance policy also covers annual health check-ups.
- Cancer (up to a specified stage)
- First-time heart attack
- Open-heart coronary artery bypass graft
- Open-heart heart valve replacement or repair
- Coma of specified severity
- Kidney failure requiring regular dialysis
- Stroke
- Major organ transplant
- Bone marrow transplant
- Permanent limb paralysis
- Motor neuron disease (ALS)
- Multiple sclerosis
- Aplastic anemia
- Bacterial meningitis
- Loss of speech
- End-stage liver disease
- Deafness
- End-stage lung disease
- Fulminant viral hepatitis
- Major burns
- Muscular dystrophy
Exclusions of critical illness insurance policy
Here are the standard exclusions under the critical illness policy:
- There is no compensation if a person dies within 30 days of diagnosis of critical illness or surgery.
- Any critical illness developed due to smoking, tobacco, alcohol, or drug intake is not included in the policy.
- The critical illness developed due to internal or external congenital disorder is not included in critical illness insurance.
- Pregnancy or childbirth-related critical conditions are not covered under critical illness insurance.
- Adventure sports injuries, self-harm, and war injuries are not included in the critical illness policy.
- Critical illness diagnosed during the waiting period
- Death occurring within 30 days of critical illness diagnosis or surgery
- Illness arising from smoking, alcohol, tobacco, or drug use
- Critical illness caused by congenital internal or external disorders
- Conditions related to pregnancy or childbirth complications
- HIV/AIDS-related illnesses
- Dental care, cosmetic surgery, infertility, or hormone replacement treatments, and treatments conducted outside India
Who can benefit from critical illness insurance plan?
A critical illness insurance plan benefits anyone concerned about financial stability during serious health crises. It's particularly advantageous for individuals without sufficient savings or those seeking additional coverage beyond standard health insurance. This coverage ensures financial support for medical treatments, daily expenses, and other costs associated with critical illnesses, offering peace of mind during challenging times.
What documents are required for critical illness insurance?
The specific documents required for a critical illness insurance application can vary depending on the insurer and the individual's circumstances. However, some common documents typically requested include:
- Application form: A completed and signed application form provided by the insurance company.
- Identity proof: Documents to verify the applicant's identity, such as a passport, driver's license, Aadhaar card, or PAN card.
- Age proof: Documents to verify the applicant's age, such as a birth certificate, school leaving certificate, or passport.
- Address proof: Documents to verify the applicant's residential address, such as utility bills (electricity, water, gas), bank statements, or a ration card.
- Medical history: Details of the applicant's past and current medical conditions, including any pre-existing illnesses, surgeries, hospitalizations, and medications. This may involve completing a medical questionnaire.
- Medical reports: Copies of medical reports, diagnostic tests, and prescriptions related to any existing health conditions or recent medical evaluations. This could include reports from specialists.
- Financial information: In some cases, insurers may request financial information to assess the applicant's ability to pay premiums. This could include income statements, tax returns, or bank statements.
- Occupation details: Information about the applicant's occupation and nature of work, as some occupations may be considered higher risk.
How to choose the critical illness insurance plan - A step-by-step guide
Buying any health insurance policy requires you to carefully analyse the policy details to ensure that there are no hidden fees and chargers, and you get maximum coverage at reasonable premium. Given below are the key things to remember when opting for a critical care insurance policy:
1. Inclusions and exclusions
You must go through the inclusions and exclusions of the critical illness insurance policy. There can be instances where a policy may not cover the expenses for an illness that you consider a critical health condition.
2. Calculate premium rates
When choosing a critical illness insurance plan, start by calculating premium rates based on your age, health status, and coverage amount. Compare quotes from multiple insurers to find a plan that fits your budget while providing adequate coverage.
3. Find out the covered illnesses
Review the list of covered illnesses in each plan. Ensure that the policy includes major conditions like cancer, heart attack, and stroke. Understanding what is covered helps you select a plan tailored to your specific health concerns and risks.
4. Sum insured
Consider the sum insured while checking different policy options. As the cost of treatment varies for different critical illnesses, checking the coverage amount becomes imperative before applying.
5. Claim settlement ratio
Check the claim settlement ratio in health insurance of the insurer. The ratio indicates the number of claims the insurer has settled in a year.
6. Waiting period
The waiting period is the stipulated time after which a policyholder can avail of the benefits of the insurance policy. Check all the waiting periods mentioned in the document to be sure about when claims can be raised and will be accepted.
Tax benefits under a critical illness insurance policy
The fact that critical illness insurance offers tax benefits is an additional advantage, and you can claim tax deductions against the premium paid under the relevant sections of the prevalent tax laws.Tax benefits under a critical illness insurance policy allow you to claim deductions on premiums paid under Section 80D of the Income Tax Act, reducing your taxable income and providing financial relief while securing your health.
Importance of critical illness insurance in India
One of the most important benefits of this health insurance plan is the enhanced coverage. It covers a wide range of critical illnesses and helps the insured manage all associated healthcare expenses besides hospitalisation costs. critical illness health policy also offers a lump-sum amount that helps individuals manage healthcare costs in a better way.
How does critical illness insurance work?
Critical illness insurance, often referred to as critical illness cover, functions as a policy where the policyholder pays regular premiums to an insurance provider. In the unfortunate event that the insured individual is diagnosed with a predefined critical illness, a waiting period typically applies.
After this waiting period, the policy offers a tax-free lump-sum payout. This financial support can be utilised to cover medical expenses, debts, or any other financial obligations. The extent of critical illness policy coverage varies based on the specific critical illnesses listed in the policy.
Typically, once a successful claim is processed, the policy terminates, offering crucial financial protection alongside traditional health insurance.
Also, read: Family Health Insurance
