We have often read or heard about adding a critical illness component in our health insurance plan. Most people wonder whether it makes sense to include this add on in one’s health insurance policy. In this article we will read about its importance and benefits so that one can take an informed decision.
What is a critical illness cover?
Critical illness is a condition that threatens life. The cover which protects against it is known as a critical illness cover. It is also known as dread disease insurance. It is either offered as a rider or as an add-on to one’s health insurance policy or can be purchased as a standalone plan. Experts recommend on purchasing the latter as it would offer several benefits as compared to a rider and is quite comprehensive. Stroke, heart attack, paralysis, cancer, organ transplant, blindness, terminal illnesses are some of the conditions covered by it. However, the complete list of conditions that are covered can vary from insurer to insurer. The cover is paid immediately after diagnosis of a critical illness condition. The sum assured is tax free.
The need for critical illness cover
Let us look at publicly available data. Number of Indians dying due to cardiovascular diseases, lung diseases, cancer, liver diseases and kidney diseases are 24 lakhs, 11.6 lakhs, 5.56 lakhs, 2.16 lakhs and 2 lakhs respectively. The average cost of treatment for the same are Rs 3.5 lakhs, Rs 20 lakhs, Rs 10 lakhs, Rs 18 lakhs and Rs 4 lakhs respectively. Incidents in India due to heart diseases and diabetes are predicted to double and cancer cases are expected to increase by 25%. An open heart surgery in a respected hospital could cost anywhere between Rs 6 lakhs to Rs 8 lakhs.
These are massive numbers. An individual suffering from any of these conditions may not only feel tremendous mental stress but one’s family could be affected too. The financial hardships caused due to the spending on treatment could be tremendous.
Benefits of a critical illness plan
Payment is offered as lumpsum
– Once critical illness is diagnosed, the entire cover is offered as a lumpsum (after the survival period of the same is in force). This is a significant benefit for the holder of the critical illness insurance policy. It plays a vital role in ensuring that both the affected individual as well as his family can only focus on the treatment rather than running around to arrange for financial assistance.
Premiums remain the same
Premium paid for health insurance policies may change over the years depending on your age during the time of policy renewal. However, when it comes to critical illness, the premium remains the same. This is a massive advantage offered by a critical illness rider.
Peace of mind
When it comes to diagnosis of critical illness, one cannot underestimate the presence of a lumpsum amount that can be immediately dispatched for spending on treatments and other particulars. Once there is peace of mind, the amount of stress and worry reduce considerably.
Finances are not impacted
Spending on treatment of critical illness is a leading cause of financial distress for middle class individuals and their families.
Don’t need to compromise on the treatment
Due to lack of financial resources, one may be tempted to compromise on the quality of hospital or treatments offered to save money. This could have both short and long term consequences.
Aspirations of family members need not take a backseat
Due to the huge spending on treatment for critical illness, one’s savings could wiped out. One would have wanted to use these savings for fulfilling aspirations of one’s family members such as for higher education or for a holiday or for buying a new house or for marriage.
Keep an eye out for
However, one cannot take critical illness coverage for granted. One also needs to keep an eye for certain important aspects of purchasing a critical illness cover. These include:
Survival period
Some insurers may demand a survival period clause which could be between 30 and more than 30 days. According to this clause, the insured individual would have to survive for the pre-decided period post getting diagnosed with a critical illness. The lumpsum would be released post survival period.
Scrutinize the fine print
Go through the fine print carefully. If you aren’t good with details, make sure that a dependable family member or friend who is adept at spotting the little details, inspects your policy. Understand what the exclusions are. Check whether these exclusions along with your details are in line with what you had expected.
Number of illnesses covered
As written earlier in the article, different insurers may provide coverage for different number of critical illnesses. Therefore before buying, one should check the entire list of critical illnesses covered by an insurer.
Credibility of insurer
– It is also a good idea to ask around and understand what has been the claim settlement ratio offered by the insurer. One can also research about how smooth is the claim settlement process.
Pre-existing critical illnesses may not be covered
Insurers may end up offering critical illness plans to individuals suffering from pre-existing diseases as long as they aren’t related to the critical illnesses covered by the policy.
Disclose everything
– Insurers have made medical examinations compulsory. Inspite of this, certain individuals may end up withholding medical facts. It is important that complete disclosure about one’s medical history, past ailments and hospitalization is done.
Conclusion
In our country – cases of diabetes, heart diseases and cancer are growing substantially. These diseases are no longer the prerogative of those who are senior in age. In fact, 40% of heart patients in India are between the age of 25 and 35. Therefore it is imperative that all members in a family end up purchasing a critical illness policy with adequate coverage and comprehensive benefits.
