The increase in critical illnesses and lifestyle diseases, along with the rising cost of medical treatment, makes it necessary to have a critical illness insurance plan today. Many health insurance plans provide a critical illness cover for an additional health insurance premium.

The following sections provide a comprehensive guide on critical illness insurance policy.

Critical illness insurance plan: What is it?

A critical illness insurance policy is designed to provide coverage for expenses you incur due to the treatment of life-threatening illnesses. Such insurance policies will provide a lump sum amount to help you cover high medical expenses for critical illnesses included under the plan.

There are critical illness rider covers that come with many health insurances. However, a standalone critical illness plan can provide extensive coverage for the treatment of several life-threatening conditions.

Top features of critical illness insurance plan

  • Coverage:  Critical insurance policies can provide cover for treatment expenses of several major critical illnesses. These include cancer, tumour, kidney failure, heart diseases, high blood pressure etc. Do remember that the number of critical illnesses covered will vary from insurer to insurer.
  • Lump-sum payment: You can receive a lump sum amount that would help cover high treatment costs.
  • Waiting period: Your insurer will provide the coverage only after a particular period. The waiting period will also vary across insurers, so check it before buying.
  • Claim application process: A critical illness plan comes with hassle-free claim processing. The claim processing can be on the basis of a diagnosis report.

Advantages of critical illness plans

You can avail of the following benefits with critical illness insurance:

  1. The lump-sum amount acts as significant financial support and ensures protection against massive expenses that you may incur for the treatment.
  2. You can avail of a tax deduction of up to Rs.25,000 under Section 80D of the IT Act for the health insurance premium you pay. However, if you are above the age of 60, you can claim a tax deduction of up to Rs.50,000.
  3. If you do not wish to opt for a standalone critical illness cover, go for a rider cover. Such critical illness riders are available on many health insurance policies against a nominal bump in the premium amount.

Exclusions under critical illness plans

You cannot raise a claim for:

  • Diseases caused due to usage of drugs, alcohol or tobacco
  • Sexually transmitted diseases such as HIV AIDS
  • Surgeries and dental treatments
  • Treatments for hormonal replacements, reproductive surgeries
  • Treatments you undergo abroad
  • For deaths within the first month of illness diagnosis
  • Diseases due to disability from birth, etc.

Factors to consider before opting for a critical insurance plan

Here are some crucial factors that you should remember while buying a critical illness plan:

  • The sum insured should be ideally thrice your yearly income
  • The premium has to be affordable
  • A critical illness insurance plan should have a low waiting period
  • You can receive the claim amount even if you are not hospitalized or admitted
  • You cannot buy a critical illness plan after you get diagnosed with a life-threatening ailment
  • Buying a critical illness plan at a younger age will help to get higher coverage at a low premium

A critical illness plan can prove to be highly beneficial for treating life-threatening diseases. However, you need to find a suitable insurance plan that aligns with your requirements.

Since health insurance premium is a recurring cost, you must consider it beforehand and opt for a premium amount that will meet all your needs without straining your finances. Additionally, since critical illness entails high and frequent treatment costs, it is imperative to have an insurance plan to protect financial interests.