Critical illness cover – Everything you need to know

What is Critical Illness Insurance?

Critical illness insurance is a special health insurance policy designed to offer financial protection on the diagnosis of life-threatening illnesses. Unlike a standard health insurance policy, critical illness cover provides a lump sum compensation of a pre-defined sum upon diagnosis of a listed critical illness. The amount can be utilised for treatments, recovery and household expenses. Generally, ten to sixty-four critical illnesses are covered, depending on the insurance provider.

Why Critical Illness Insurance Matters?

Life-threatening critical illnesses like chronic respiratory illness, cardiovascular diseases, kidney diseases and cancers are becoming increasingly common in India. As per the World Health Organisation’s report, non-communicable diseases like diabetes, cardiovascular diseases, etc., account for over 60% of deaths in India. As per ICMR, more than 5 lakh cancer patients die every year in India. These medical conditions usually require surgery, long-term medical care, and the treatments are highly expensive. For example, regular kidney dialysis can cost around INR 4 lakhs to INR 6 lakhs a year. Your standard health insurance policy may not be able to support such highly expensive and prolonged treatments. Hence, having a critical illness cover is extremely important to have financial security and to access quality treatment at the right time.

Key Features and Benefits of Critical Illness Health Insurance

The following are the key features and benefits of critical illness cover offered by most health insurance providers:

Coverage for various critical illnesses

The number of critical illnesses covered may vary from one insurance company to another. Some insurance companies provide cover for up to 64 critical illnesses. Some of the critical illnesses covered under most critical illness health insurance policies are listed below:

• Myocardial infarction/heart attack of specified severity
• Various types of cancer of specified severity
• Repair of heart valves or open-heart replacement
• Open chest coronary artery bypass graft
• Kidney failure (needing regular dialysis)
• Stroke
• Permanent paralysis of limbs
• Major organ transplant (lung, heart, liver, kidney, etc.)
• Advanced Alzheimer’s disease
• Pulmonary hypertension of specified severity
• Total blindness
• Major burns
• Benign brain tumour
• Deafness
• Advanced Parkinson’s disease
• Motor neuron disease
• Lupus (severe stage)
• Irreversible loss of speech

Lump sum coverage benefit

Critical illness insurance policies provide a lump sum coverage on diagnosis of the listed critical illness, regardless of the actual treatment cost. However, a survival period of 14 days to 30 days, depending on the policy term, must be satisfied to receive the benefit.

For example, you buy a critical illness cover for INR 25 lakhs. Unfortunately, if a critical illness is diagnosed in the next year, then you get the payout of INR 25 lakhs on completing the survival period. The policy gets terminated after the payout.

The lump sum amount can be utilised for expensive treatments, surgeries, recovery therapies and more without having to deplete your investments and savings. This works like a financial lifeline at the time of distress.

No lengthy waiting period

Most of the critical illness insurance plans come with only a 90-day waiting period from the start of the policy and a survival period requirement of up to 30 days on diagnosis. Some critical illness health insurance policies also provide cover for kids above 5 years of age.

Fixed premium cost

Premium cost for critical illness insurance remains constant throughout the policy term, say 10 years, 20 years, or so. Hence, buying at a young and early age can get you higher coverage at a relatively lower cost.

Tax benefit

Premium paid for the critical illness health insurance policy qualifies for a tax deduction under Section 80D of the Income Tax Act, 1961, for up to INR 25,000. And, the limit is up to INR 50,000 for senior citizens.

Critical illness cover excludes non-severe forms of major illnesses, self-inflicted injuries, diagnoses during the waiting period and non-essential or cosmetic treatments and surgeries.

Critical illness health insurance policy is extremely essential for every earning individual in the family, especially if you have a family history of major illnesses. At Jio Insurance Broking, you can compare critical illness insurance from various leading insurance companies based on the number of illnesses covered, benefits and cost. You can make a cost-effective and informed decision via comparison shopping.

Tips to Choose the Right Critical Illness Cover

Here are some important tips to choose the right cover:

• Choose the right coverage amount depending on your income
• Compare the list of critical illnesses covered
• Take a look at the exclusions, waiting period, and the terms and conditions

Conclusion

To conclude, critical illness cover is a financial lifeline that helps you fill the crucial gap in your standard health insurance policy by safeguarding you financially against life-threatening illnesses. The wider coverage of multiple critical illnesses, shorter notice period, and lump sum payout help in the treatment and recovery period of the toughest battle. It offers peace of mind to you and your family on a financial front while you are under tremendous emotional distress.