Important Facts About Critical Illness Insurance in India

A critical illness cover provides a vital financial safety net, offering a lump sum payout upon the diagnosis of a life-threatening disease like cancer or a heart attack. The Institute of Actuaries of India reports an alarming 80% rise in coronary heart disease across various age groups in India. Such a diagnosis can cause severe financial and emotional shock.

Thus, to ensure timely treatment without draining your savings, this guide walks you through the key facets of critical illness insurance in India.

What is a Critical Illness Cover in Health Insurance?

A critical illness cover in health insurance is a type of plan which provides financial assistance for critical and life-threatening conditions, such as cancer, heart attack, stroke, kidney failure, and more.

This plan gives you a lump-sum amount irrespective of the actual cost of treatment. Additionally, you can buy a critical illness plan either as a separate plan or add it to your existing health insurance policy to get extended coverage. 

If you are wondering what some of the important facts are that you should know before buying a critical illness cover, read the pointers below:

What are Some Essential Facts about critical illness cover in India?

Here are 8  essential facts about critical illness coverage in India:

Lump Sum Payout

Unlike a traditional health insurance policy, which only pays for hospital bills, critical illness insurance provides a fixed lump-sum payout upon diagnosis. This amount can be used not only for treatment but also for recovery, rehabilitation, or managing household expenses.

Also Read: Which is Better - Health Insurance or Term Insurance?

Survival Period Requirement

Many insurance companies in India include a survival clause in their critical illness insurance plans, typically around 30 days. This means the insured must survive for a specific number of days after the date to avail the policy benefits.

Waiting Period

There is typically a waiting period of up to 90 days. During this time, the insured person cannot make any claims. It is important to note that any diagnosis made during this period will not be covered under the policy.

Specific Coverage Range

Critical illness insurance plans only cover a specific range of diseases. Diseases such as cancer, cardiovascular diseases, heart attack, stroke and kidney failure. The exact list may vary across insurers, so reviewing the policy wording is essential before purchase.

Single Claim Policy

In critical illness insurance, your insurer allows you to make only one claim. After your first claim, your insurer will pay the entire sum insured. This means that once the benefit is paid, the policy will cease to exist.

Stand Alone or Rider

You can buy it as a standalone policy or add it to your existing health insurance policy as a rider. Choosing between the two depends on your coverage needs and budget.

Tax Benefits

Premiums paid for health insurance plans are eligible for tax deductions under Section 80D of the Income Tax. The deduction under this section is ₹25,000 per financial year for individuals aged 60 or less and ₹50,000 for senior citizens. 

No Coverage for Pre-Existing Disease(PED)

Many insurance companies in India do not cover pre-existing diseases immediately. However, some insurers may offer coverage after a specified waiting period, depending on policy terms and underwriting conditions.

Grouped into 5 major sections, Bajaj General Insurance offers coverage for a wide range of life-threatening diseases. Be it cancer or a neurological disease, you get coverage for all. Save out-of-pocket expenses and buy a critical health insurance plan now!

What are the Benefits of Buying Critical Illness Cover?

The benefits of buying critical illness cover include extending financial support, making treatment more affordable, and keeping premiums affordable. Below are points that explain some of its benefits:

1. Extends Financial Support: This is an advantage. The critical illness insurance plan gives you instant access to funds when you are in a health crisis. 

2. Making Treatments Affordable: Critical illness treatments can be extremely costly. With a dedicated critical illness cover, you can access quality treatment without worrying about financial constraints.

3. Budget-Friendly Premiums: Critical illness plan premiums are relatively affordable, making critical health insurance accessible to a wider population.

Also Read: 4 Easy Steps for Health Insurance Policy Check Online

Why Health Insurance is not Enough for Critical Illness?

Whether you are diagnosed with cancer or heart disease, treating critical illness in India is extremely costly. According to the New Indian Express, in India, approximately 43% of households face financial distress due to the rise in cancer treatment costs.

The treatment not only costs an overnight hospital stay but also procedures such as chemotherapy and radiotherapy. In some situations, you might need to leave your job during treatment, which can lead to a loss of income.

To understand this better, let’s learn this with an example:

Scenario:

Rohan, a 35-year-old software engineer, has been diagnosed with stage 2 cancer.

What would be the situation without a critical illness insurance plan?

With a Standard Health Insurance Plan

His standard health insurance covers ₹5 lakh for hospitalisation and surgery. However, chemotherapy costs ₹3 lakh and may only be partially covered. Additionally, he takes six months off work, resulting in a loss of ₹6 lakh in income. This creates a significant financial burden, even with basic health insurance.

With a Critical Illness Insurance Plan

As soon as his cancer diagnosis is confirmed, he gets a lump sum payout of ₹10 lakh (if he chooses the cover) from his insurer. He further uses this amount of money to pay for the expensive medical treatments. Settles his monthly EMIs and manages his day-to-day expenses without touching his savings. 

This clearly highlights why relying solely on traditional health insurance may not be sufficient to cover critical illnesses.

To stay adequately protected, it is important to renew health insurance policies on time and consider adding a critical illness cover from Bajaj General Insurance for enhanced financial security.

Final Words

A critical illness insurance plan provides additional protection for medical expenses. The lump-sum benefit received can be used to manage treatment costs, lifestyle needs, and financial obligations during recovery.

By understanding these key facts, you can make an informed decision and choose a plan that aligns with your healthcare and financial needs.

Remember the facts and buy a plan from Bajaj General Insurance. Get the best treatments and stay protected. 

Frequently Asked Questions

What critical illnesses are covered in most insurance plans?

Critical illnesses like cancers, heart attacks, strokes, kidney failures, organ transplantations, paralyses, and nervous system diseases. It may vary based on the insurer’s policy coverage list.

Is diabetes covered under the critical illness plan?

The critical illness plan does not cover diabetes unless there are complications that fall within the critical illness criteria. However, insurers can consider diabetes after certain waiting periods or in their comprehensive plans.

Can you purchase a critical illness plan after being diagnosed with the illness?

No, you cannot purchase critical illness insurance after a diagnosis. Critical illness insurance requires an individual to purchase the plan before the illness, as insurers exclude pre-existing conditions.

Is a medical test required before buying a critical illness plan?

Depending on age, sum insured, and medical condition, insurers may require medical examinations before issuing critical illness insurance. Some insurers issue critical illness plans without a medical examination for low sums assured.

Is critical illness covered in mediclaim?

Mediclaim covers hospitalisation expenses, whereas critical illness insurance provides a lump-sum payout. Both can complement each other for comprehensive coverage.

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Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.