Critical illnesses require immediate attention and specialist care. Illnesses like cancer, organ transplants, heart related treatments, etc. take a toll on a family's emotional and financial health, apart from causing physiological and psychological distress. Dealing with the related medical costs and expenses can be a nightmare. This is where the role of a critical illness plan comes into play.
Read on to find the details
Critical illness plans are health insurance plans designed to cover critical illnesses. A lump sum benefit, equal to the sum insured, is paid if the policyholder is diagnosed with covered critical illnesses.
Critical illnesses require complicated, extensive and expensive treatments. They are physiologically damaging and psychologically draining.
Critical illness health plans have following distinctive features:
Coverage offered
They cover specified critical illnesses. Benefit is paid only if the insured is diagnosed with a listed illness.
Illnesses covered
A critical illness plan can cover a single illness or a combination of two or more ailments/illnesses. Some common illnesses covered by the plans include:
- Open chest Coronary Artery Bypass Graft (CABG) Surgery
- Cancer of specified severity
- First heart attack of specified severity
- A stroke causing permanent symptoms
- Multiple sclerosis causing permanent symptoms
- Major organ transplant
- Kidney failure for which regular dialysis is required
- Coma of specified severity
- Major burns
- Repair of heart valves
- Aorta surgery
- Bone marrow transplant
- Bacterial meningitis
- Muscular dystrophy
- Aplastic anaemia
- Motor neurone disease which causes permanent symptoms
- End stage liver disease
Premiums
Since benefit is paid only in case of diagnosis of a critical illness, the premium amount is low.
Claim
When the insured makes a claim for the sum insured on diagnosis of a critical illness, the plan is terminated.
Benefit usage
Use claim amount from a critical illness insurance policy to:
- Pay for advanced treatments
- Repaying existing liabilities or other financial obligations
- Replace loss of income when capacity to work is lost due to an illness
Basis of coverage
Critical illness insurance cover is offered on an individual coverage basis. Family floater plans are not available under this category. You can buy a plan to cover your family members. However, individual sum insured would be available for each member.
Age eligibility
Adults between18 to 65 years of age can buy critical illness plans. For minor children, critical illness insurance policy is available at 5-6 years of age. Parents can buy plans for infants aged three months and above if either of the parents is already covered under the same plan.
Sum insured
The sum insured under the critical illness insurance policy usually starts from Rs.2 lakhs or Rs.5 lakhs and goes up to Rs.10 lakhs. Most insurance companies do not offer high sum insurance.
Critical illness insurance cover is offered by both life and health insurance companies, albeit there some major differentiators. Here are some of the differences:
| Critical Illness Plan |
Health Insurance Companies |
Life Insurance Companies |
| Term of the plan |
Offered for a term of one, two or three years. It is offered as an annual plan |
Offered for a continuous period of 5 years or 10 years |
| Coverage |
Several critical illnesses are covered |
Limited critical illnesses are covered |
| Premiums |
Premiums are low |
Premiums might be a little higher |
Critical illness insurance cover is different from normal health insurance plans and given below are the major differences:
Here are some of the differences:
| Features |
Critical Illness Insurance Cover |
Health Insurance Cover |
| Type of plan |
Fixed benefit plans |
Indemnity insurance plans |
| Insurance for |
Individuals only |
Self and family members |
| Incidence of claim |
Claim insurance on diagnosis of a covered critical illness |
Claim insurance for treatment or hospitalization of a covered illness |
| Sum Insured paid |
Lump sum amount paid on diagnosis of a covered illness |
Incurred medical costs up to the limit of the sum insured |
| Benefit Limits |
No usage limits - pay medical expenses or non-medical financial liabilities |
Pays for medical expenses supported by relevant bills |
| Coverage offered |
Provides cover against specified critical illnesses |
Wide coverage features including pre and post-hospitalization, ambulance costs, day care or AYUSH treatments, etc |
A critical illness insurance cover provides the following benefits:
- It is a necessary cover to manage financial turmoil in case of a critical illness.
- The lump sum benefit supplements an existing health insurance cover. Avail specialised medical treatments not covered under a health insurance plan.
- Meet financial liabilities with lump sum benefit received. Create a fund for the family financial needs, education fund for a child, pay off debts, or replace lost income.
- Critical illness plan offer deduction under Section 80D up to Rs.25, 000 under the Income Tax Act. Limit increases to Rs.50, 000 for senior citizens. Also avail an additional deduction of Rs.50, 000 on buying plan for your senior citizen parents.
Quickly Read: Critical Illness Health Insurance Plans - Do You Need One
When buying a critical illness insurance plan online or offline, keep the following in mind:
- Compare the different plans and their list of critical illnesses covered. Buy a plan covering higher numberof illnesses for a more comprehensive coverage.
- Compare critical illness insurance quote online and offline. The process is easier online at Paybima - visit the page and compare all the features easily. The various plans, their coverage features, premium and quotes can be compared easily on one page. This enables an informed decision.
- Check out the claim settlement history of the company - buy from a company which has the best claim settlement ratio ensuring higher probability of your claim settlement.
To sum up, find the best critical illness insurance quote by comparing:
- The coverage amount available - opt for the maximum possible amount for maximum benefits.
- The critical illnesses covered - the higher the better.
- The critical illness insurance quote - the lower the better.
- Claim settlement record of the company - the higher the better.
- The waiting period applicable - the lower the better.