Standalone Policy vs. Critical Illness Rider – What to Choose?

6 min read

A good health insurance policy can prove to be one of the best investment helping you immensely during a medical crisis by shouldering the medical expenses. The most significant benefit is that the insurance company will pay for the costs of hospitalization and other expensive procedures if you need to be treated for an illness. Even though India’s insurance market is not large enough, many people are now searching for the right type of health insurance plan to make use of insurance and gain maximum benefit. Health insurance sure has provided a lifeline to many families during the difficult times of covid19 through cashless claims.

When choosing health insurance, it is common to think of common illnesses or diseases, but it is crucial to consider the critical illnesses as well. An unexpected illness can lead to financial loss for your family and cause mental anguish. It is why critical illnesses should be dealt with care right from the beginning, as it has long-term implications and can cause monetary losses impacting the entire family.

What is a critical illness?

Life-threatening conditions or medical conditions that cause increasing expenses include heart attack, cancer, organ transplants, and third-degree burns. Unexpected onset of a serious illness can lead to financial hardship and income loss, further leading to severe pain and mental agony. It may even wipe out your savings. Therefore, you need a health insurance in the event of a serious medical emergency, for which insurance companies offer critical illness rider or critical illness cover.

Difference Between Critical illness rider and Standalone health insurance policy

You can also get coverage for critical illnesses through a standalone policy. The critical illness rider can be added to an existing insurance policy which can provide coverage for critical illnesses through both a standalone policy and a rider. Before you can decide which to choose between the two, let us first understand the differences between each of them and their specific purpose.

  • Coverage: Critical illness riders have some restrictions regarding the coverage and the policy terms. IRDA regulations state that a rider can’t have a premium higher than the base premium of the term insurance plan. Sum Assured also has limitations. It cannot exceed the certain percentage of a base sum assured or have a fixed limit. These restrictions don’t apply to Standalone Critical illness coverage. Therefore, you can choose the amount of coverage that best suits your needs.
  • Limits: Critical Illness Riders do not cover many of the diseases listed. None of the critical illness riders cover Stage-1 Cancer. You might consider a standalone policy if you require coverage for all stages.
  • Basic Plan: To add Critical Illness Riders to  your existing health insurance, you’ll first need to purchase a term plan. A policy that covers critical illness is called standalone coverage.
  • Documentation: If you buy the Critical Illness Rider, you may not need to submit additional documents. As Standalone Critical Instability coverage does not link to any other policy, you will need to submit the documentation again.
  • Medical test: You will need to have medical tests to cover the requirements for the Critical Illness Rider. If you wish to buy Standalone Critical Illness coverage, you must undergo separate medical tests.

When it comes to choosing the most advantageous health insurance, there are many options. It can be tough to find the right policy for you, and insurance is complicated, and not everyone knows everything. Critical illness is one of the most important aspects to consider when selecting health insurance.

Also Read: Things One Must Know About Smoking and Health Insurance

List of Critical Illnesses

These are only a few of many critical diseases that insurance policies cover. These conditions often require more expensive treatment than standard insurance policies.

  • Myocardial Infarction (or Heart Attack)
  • Aorta surgery
  • End-stage liver disease
  • Bypass or Open Chest CABG
  • Apallic Syndrome is a persistent vegetative state.
  • Benign Brain Tumours
  • End-stage lung failure
  • Alzheimer’s disease
  • Motor neuron disease
  • Beyond a certain stage
  • Poliomyelitis
  • Permanent limb paralysis
  • Loss of limb
  • Head trauma severe
  • Coma beyond a certain level
  • Muscular dystrophy
  • Stroke causing permanent disability
  • Medullary cystic diseases
  • Aplastic Anaemia
  • Major or third-degree burns
  • Angioplasty
  • Parkinson’s disease
  • Cardiomyopathy or heart muscle disease is also known as cardiomyopathy.
  • Blindness
  • Chronic lung disease
  • Transplantation of bone-marrow
  • Multiple sclerosis symptoms are persistent
  • Heart valve surgery
  • Infection of the kidneys
  • Organ transplant
  • Brain surgery
  • Loss of independence
  • Deafness
  • Speech loss

Also Read: What is a Third Party Administrator (TPA) in Health Insurance & its Role?

Insurance policies for critical illness may differ in the number of covered critical illnesses, and your insurance company can provide more information.

To buy critical illness coverage or standalone policy: As medical costs rise yearly, a health insurance policy is vital. This is not a question of one or the other. Critical illness insurance should be added to your existing insurance policy. Your insurance policy will pay for all hospitalization and treatment costs. But even after you are discharged from the hospital, serious illnesses can still have severe consequences.

If the insured person is diagnosed with a life-threatening condition or critical illness, the insurer will pay a lump amount. This amount can be used to pay for rehabilitation costs and as income replacement. The funds from a critical illness policy can be used in any way you want. This policy is an excellent addition to existing health insurance.

Critical illness benefits are available as a rider to regular income plans, savings plans, and term insurance, and the critical illness benefit rider will protect your future savings.

A small annual premium can ensure top-quality healthcare for you and your loved ones. With PayBima’s expert advice, you can get to know all the different aspects of an insurance plan, compare the various insurance plans for more information, and as per needs according to your life stage, narrow down your options and can choose the policy that suits your needs the best.

FAQs

Q: What is a critical illness rider?
A critical illness rider is an optional add-on feature of an insurance policy that the insured can
buy as additional benefit to his/her life insurance policy.

Q: What is standalone medical insurance?
Standalone health insurance plan is one that come with higher coverage and higher premiums.
These plans come with a waiting period.

Q: Differences between Standalone Policy and Critical Illness Rider?
A standalone policy is a plan that provides comprehensive coverage for critical illnesses.
The critical illness rider is an optional add-on feature that you can buy along with your health
insurance policy.

Q: What illnesses are covered under critical illness insurance?
Heart attack, Heart valve replacement due to defects or abnormalities, Coronary artery diseases
requiring a bypass, Stroke, Cancer, Kidney failure etc., are covered under critical illness insurance.

Q: Which is the best critical illness policy?
Here are some of the top critical illness policies:

  • Bharati AXA Flexi Term
  • Bajaj Allianz eTouch Online Term
  • DHFL Pramerica Flexi Term
  • Edelweiss Tokio My Life+
  • HDFC Ergo General Insurance

Q: Can I have more than one critical illness policy?
You can buy more than one critical illness cover and each of these policies will pay for the
critical illness. You must inform in advance to the current policy provider about the new policy you
are planning to buy.

Q: What is the benefit of critical illness insurance?
A critical insurance pays a lump sum amount which can be used to cover medical costs.
There are many benefits of critical illness insurance, such as:

  • Offers protection for inured
  • Offers accidental death benefits
  • Protection against disability
  • 100% payout benefit
  • Tax benefit
  • Hassle-free experience
  • Monthly income

Q: What is the benefit of Standalone Policy?
It provides larger coverage. It provides comprehensive coverage for
critical illnesses. It comes with higher coverage and higher premiums.

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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