Why buy critical illness insurance early in life?

Buy critical illness insurance early to get lower premiums, broad coverage, ensure better treatment, and prevent financial distress.
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Why buy critical illness insurance early in life?
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3 mins
20-July-2023

The rising cases of critical illnesses in India have led to a significant increase in healthcare costs. Since a medical emergency can strike at any time, it is safer to be prepared in advance. In addition, standard health insurance policies usually do not cover severe or life-threatening medical conditions. Therefore, a critical illness insurance policy helps you meet such emergency needs more effectively.

Read on to know more about critical illness insurance policies and why you should get one as early as possible.

Understanding critical illness insurance

A critical illness insurance policy refers to a healthcare policy that acts as an additional cover over and above a regular health insurance policy. It offers financial protection if you are diagnosed with chronic or acute, life-threatening diseases. The diseases included under this policy vary among insurance providers, but the most common ones covered are:

  • Cancer (specified stage or severity)
  • Stroke
  • Heart attack (usually first time only)
  • Coronary artery diseases requiring surgery
  • Permanent limb paralysis
  • End-stage liver disease
  • End-stage lung failure
  • Kidney failure
  • Encephalitis
  • Blindness
  • Parkinson's disease
  • Alzheimer's disease
  • Muscular dystrophy
  • Multiple sclerosis
  • Motor neuron disease/ amyotrophic lateral sclerosis (ALS)
  • Loss of speech
  • Major burns
  • Aplastic anaemia

Critical illness insurance policies also cover the costs of major organ transplantation procedures, graft surgeries, bone marrow transplants, heart valve replacement, etc.

You can purchase a critical illness policy either as a standalone cover or an add-on to regular health insurance plans. The sum insured in these policies is usually disbursed as a lump sum upon diagnosis of a critical disease covered under the plan.

How is critical illness health insurance beneficial for your future?

In general, buying a critical health insurance policy is useful for everyone since a severe medical condition can occur at any time. However, with the rising incidence of lifestyle-related diseases among today's youth, buying a critical health policy is becoming more important.

The advantages of buying critical illness health insurance early in your life are as follows:

• Coverage for medical bills

Insurance providers disburse the entire sum insured of a critical illness insurance policy as a lump sum amount upon diagnosis of severe disease. Therefore, you can directly avail of medical treatment without waiting for funds. This is unlike standard health insurance policies, where the sum insured is disbursed according to the expense documents.

• Non-medical expenses cover

You can use the sum insured amount to fund more than just your medical expenses. These can include household expenses, children's education fees, transportation costs, etc. This feature provides financial protection to you and your family during a medical emergency.

• Income replacement

If diagnosed with a critical illness, you may be forced to take extended leave from work due to your health condition. This will have a noticeable impact on your income. A critical illness insurance policy can cover the loss of income and provide financial protection during this income loss.

• Attractive premiums

The premiums payable when buying a critical illness cover depend on the age and health of the applicant. The younger you are, the healthier and less likely to suffer from a critical disease you are perceived to be. Therefore, insurance providers will charge lower premiums on your critical illness insurance policy than older applicants. This is another reason that you should buy such a policy as early as possible.

• Tax benefits

Critical illness insurance policies are also subject to tax benefits under the Income Tax Act, 1961. According to Section 80D of the Income Tax Act, 1961, premiums paid towards critical illness insurance in India are subject to tax deductions up to Rs. 25,000 for beneficiaries who are not. For senior citizens, tax deductions of up to Rs. 50,000 are applicable.

• Alternatives to critical illness insurance

The rising healthcare costs in India have made access to quality healthcare significantly expensive. Having a health insurance policy like those extended by Bajaj Finance has thus become an absolute necessity. However, standard healthcare policies do not cover acute life-threatening diseases. Therefore, there are no real alternatives to critical illness insurance policies.

You can fund your treatment from your savings account or other investment instruments. However, you will still incur significant expenses and make it financially difficult for yourself and your loved ones.

Pros of critical illness insurance

  • You can utilise the sum insured amount to cover expenses beyond medical costs.
  • Critical illness insurance protects your loved ones during financial stress.
  • Tax deductions are applicable on insurance premiums.

Cons of critical illness insurance

  • Coverage for some conditions like cancer depends on the severity, so some types and stages of cancer may not be covered.
  • Critical illness policy may not cover the recurrence of conditions like a heart attack.
  • Coverage depends on age.
  • There may be no coverage for certain chronic diseases.

Critical illness insurance policies are thus very essential to provide financial protection against medical emergencies caused by severe or life-threatening conditions. In addition, the earlier you buy a critical illness policy, the more secure you and your loved ones will be.

Also, read - Maternity insurance

Frequently asked questions

Why is early critical illness important?

Critical illness can occur at any age, and it is a significant burden for anyone to deal with, both financially and emotionally. Early detection and treatment can save lives, and critical illness insurance can offer financial support to those diagnosed with such illnesses. It's crucial to start early to ensure that you have coverage when you need it and can address any associated costs with ease.

Why should I buy critical illness insurance?

Critical illness insurance provides the necessary financial support to individuals for medical expenses in case of a severe medical condition diagnosis. It can cover costs of treatments, surgeries, hospitalisation, and provide other benefits as per the policy. It ensures that there is no abrupt financial burden on the individuals or their family during a critical health crisis.

What is the most common reason for a critical illness claim?

Cancer is the most frequent critical illness claim reason that policyholders make. Other reasons include heart attacks, strokes, major organ transplants, and other life-threatening medical conditions. These illnesses can put individuals in a financially challenging situation, which is where critical illness insurance comes in to aid.

Is it worth buying critical illness cover?

Yes, it is worth buying critical illness cover because it can provide financial support and security at a time when you need it the most. Medical treatments for serious illnesses can be incredibly expensive, and this policy can cover the costs associated with any treatments, surgeries, or long-term therapy. It is a worthwhile investment for anyone, especially if there is a family history of critical illnesses.

Why should I get health insurance at an early age?

Getting health insurance at an early age has several benefits. Firstly, it ensures that you are protected from unexpected medical expenses. Medical emergencies can arise at any time and without warning, and the costs associated with them can be very high. With health insurance, you can be assured that you will have the financial protection you need in case of an emergency or hospitalization. Secondly, if you get health insurance at an early age, you are more likely to be eligible for a comprehensive plan with better coverage at a lower premium.

What are the disadvantages of critical illness insurance?

Critical illness insurance typically covers a few specific illnesses, such as cancer, heart attack, and stroke. As such, it may not cover all illnesses or conditions that may arise, leaving you exposed to out-of-pocket expenses. Another disadvantage is that the coverage amount may not be sufficient to cover your medical expenses, leaving you with large bills to pay. Additionally, critical illness insurance tends to be more expensive than traditional medical insurance, making it unaffordable for some people. Lastly, some critical illness policies have a waiting period before benefits are paid out, which may not be ideal if you need immediate medical care.

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Insurance is the subject matter of solicitation. *T&C Apply - Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer's website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. Tax benefits applicable if any, will be as per the prevailing tax laws. Tax laws are subject to change. Tax laws are subject to change. BFL does NOT provide Tax/Investment advisory services. Please consult your advisors before proceeding to purchase an insurance product. Visitors are hereby informed that their information submitted on the website may also be shared with insurers. BFL is also a distributor of other third party products from Assistance Services providers such as CPP Assistance Services Pvt. Ltd., Bajaj Finserv Health Ltd. etc. All product information such as premium, benefits, exclusions, sum insured, value added services, etc. are authentic and solely based on the information received from the respective insurance company or the respective Assistance service provider company.

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