Terminal Illness vs Critical illness : Things You Need to Know About Terminal and Critical Illness Covers in Health Plan

What is a Critical Illness Cover in Health Insurance?

A critical illness or terminal illness cover in medi-claim is designed to offer financial protection to the policyholder in case he/she gets diagnosed with a life-threatening health condition. A few examples include cancer, heart stroke, lung disease, and more. In such cases, the disease or illness is likely to result in death and therefore it is termed fatal or critical illness.

It is inevitable then that the treatment duration and process for such health conditions lasts for a long time, sometimes for the entire life of the patient. It is therefore bound to be highly expensive and sometimes even unaffordable for the patient’s family.

To help provide financial protection to the family in these times, most insurance companies offer a critical illness cover. This cover benefit is either provided in conjunction with a term insurance or life insurance policy or as an add-on rider benefit with the base health insurance plan to the policyholder.

What Does Critical Illness Insurance Cover?

As is evident from the name, a critical illness cover is designed to provide financial aid to the insured in the case of a severe or terminal illness with a probability of death. Most critical or terminal illness covers offer protection against a number of critical illnesses, some of which include:

• Cancer, generally up to a certain stage
• Open heart surgery
• A specific severity of coma
• First-time heart stroke
• Open heart repair or valve replacement surgery
• Lung disease
• Tumors

All of the above conditions are likely to threaten the life of an individual and hence require timely treatment. The time taken for the condition to be treated might extend beyond expected and therefore it is imperative for everyone to buy health insurance with critical illness cover to insure the life of their loved ones.

Top 5 Things to Consider Before Buying a Critical Illness Rider

In the above section, we had the terminal illness cover explained in detail. Now let us take a look at everything you need to know about terminal and critical illness covers before buying one in your health insurance plan:

1. Determine the total number of illnesses covered for: This is one of the most important considerations when thinking of buying a critical illness cover. You want to make sure that you are provided insurance coverage for as many diseases as possible. This number varies from one insurer to another, hence it’s a good idea to check for how many critical health conditions your insurer covers under your health plan.
2. Ensure that the insurer has a good CSR: The Claim Settlement Ratio (CSR) of the insurance company helps decide which one to go for when it comes to buying any health insurance policy. In addition, the claim settlement process followed by the respective insurer is equally important to consider in the decision. A company that offers a smooth and hassle-free claim-settlement process and a good CSR is worth buying a critical illness rider from.
3. Consider buying a cover only when the condition has become severe: The severity of the disease must be considered before buying a terminal illness cover. This is because with rapid advancements made in medical science, most illnesses/diseases are no longer threatening or fatal. Most of them have timely treatment options available too. In such cases buying a separate or add-on terminal or critical illness cover may not really be necessary.
4. Standalone critical illness plan over add-on rider: The first option is preferable any day because a standalone critical illness health insurance plan allows the policyholder the flexibility to choose a certain amount of sum insured, bearing the risks involved in mind. However, if you choose to add on a rider to the original policy, the sum insured cannot exceed the base mediclaim policy.
5. Check for the survival and waiting period clause: This is yet another point to consider before buying a critical illness rider. Some insurers mandate a waiting period clause in the health policy, meaning that it is necessary to wait a certain specified period before filing a claim with the insurer. The waiting period in critical illness covers is generally 90 days.

Similarly, the insurance company would also provide for a survival clause. Under this plan, the insured is required to survive or stay alive for at least 30 days after the disease has been diagnosed. It is only upon completion of the 30-day period that the policyholder can file a claim. It is imperative to check for both these clauses before buying the critical illness cover.

Difference between critical illness and terminal illness

A common question that is bound to arise in the mind of a policyholder is whether a critical illness cover is the same as a terminal illness cover or different. Part of the confusion stems from the fact that the terms ‘terminal illness’ and ‘critical illness’ are sometimes interchangeably used.

Here we understand the difference between critical illness and terminal illness and how the two health insurance covers are different too. The prime difference between the two types of covers is that a terminal illness cover is issued to the policyholder when the diagnosis suspects the life expectancy of the patient to be even less than a year.

On the other hand, a critical illness cover is designed to offer financial protection to the insured only in case of a critical health illness. A few examples would include a specific prolonged injury or serious illness, the treatment of which is bound to be prolonged.