Critical Illness Insurance: What is it? Know the Benefits & Coverage

• Written by Anjali Sharma

  Reviewed by Munmi Sharma

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The health insurance market is flooded with numerous plans, making it challenging to choose the right one that meets your healthcare needs. This critical illness health insurance is designed to provide financial protection against severe, life-threatening conditions such as heart attacks, strokes, cancer, and kidney failure. Unlike traditional health insurance, which covers a wide range of treatments, critical illness insurance offers a lump sum payout that can be used for medical expenses, loss of income, or other financial needs during recovery. With the rising cost of healthcare, this type of coverage ensures that you're not financially burdened in the face of a serious health crisis, offering peace of mind and crucial support when needed most.

What is Critical Illness Insurance?

Critical illness insurance is a type of health insurance designed to provide financial protection in the event you're diagnosed with a serious illness, such as cancer, heart attack, stroke, or kidney failure. It usually offers a lump sum payout upon diagnosis of a covered condition, which can be used to cover medical bills, treatment costs, or any other financial needs during recovery. This coverage helps reduce the financial burden associated with severe illnesses, ensuring you have the resources to focus on your recovery without worrying about money.

Why Do You Need Critical Illness Coverage?

Critical illness coverage provides financial support for medical expenses if you are diagnosed with a serious illness. It can help you avoid depleting your savings or investments to pay for treatment.

Below are some of the reasons why you need critical illness coverage:

• Financial Security: Critical illness coverage helps to avoid a financial crisis during any medical emergency.
• Income Replacement: During recovery, you might not be able to work. Critical illness coverage helps replace lost income, ensuring financial stability.
• Peace of Mind: Knowing you're financially prepared for a life-threatening illness reduces stress and allows you to focus on your recovery.
• Rising Healthcare Costs: With medical expenses continuously increasing, this coverage helps mitigate the financial burden of treatment.
• Coverage for Severe Illnesses: It covers critical conditions like cancer, heart attack, stroke, etc., that could otherwise lead to significant out-of-pocket expenses.
• Comprehensive Support: The payout can be used for anything, not just medical bills, such as daily living expenses or necessary home modifications during recovery.

5 Diseases Causing Critical Illnesses

Knowing the importance of critical illness insurance has become much more crucial considering the kind of life we all have been living.

Let us discuss the 5 major diseases that cause critical illnesses and require timely treatment:

• Heart Diseases: Heart diseases include coronary artery diseases such as heart attack, stroke, and hypertensive heart disease. It becomes essential to know the seriousness of such critical illnesses and get the right critical illness health insurance on time.
• Cancer: It is considered the most frightening disease and should be taken care of on time. According to a report by WHO, one in 10 Indians will develop cancer during their lifetime, and one in 15 will die of the disease.
• Renal Failure: Renal failure is caused due to the malfunctioning of the kidneys. They fail to lose the ability to work and filter waste from our blood, which leads to an overload of toxins in the body, increasing the risk of getting infections.
• Paralysis: It is a medical condition where muscle stops functioning in any part of our body. It could either be partial, complete, temporary, or permanent. It needs timely attention so that it doesn’t get even more contagious to our system.
• Lung Ailments: Lung ailments can be critical illnesses if they cause respiratory failure, nonpulmonary organ failure, or other conditions that impair respiratory function

How Does Critical Illness Cover Work?

A critical illness cover is an indemnity-based health cover that provides comprehensive coverage for various critical illnesses.

By paying an affordable premium, you can avail coverage for various medical treatment expenses, including in-patient hospitalisation, pre-and-post hospitalisation medical expenses, ambulance, day care treatment, etc. In the event of a hospitalisation, you can opt for the cashless facility at the nearest network hospital and skip the hassle of paying hospital bills. The insurer will pay the bills directly to the hospital. If you select a non-network hospital for treatment, you should apply for a reimbursement claim.

Benefits of Having a Critical Illness Cover in a Mediclaim Policy

The most significant benefit of critical illness insurance plans is the financial security they offer during times of medical crisis. Let us discuss in detail the benefits of having a critical illness cover in a mediclaim policy:

• Provides Cashless Treatment: One of the most important benefits of a critical illness policy is the instant treatment provided to the patient without any delays. That is, the insured person can avail of cashless treatment at any network hospital.
• Covers Expensive Medical Treatments: A critical illness policy will provide adequate coverage for various treatments. It will cover expenses related to in-patient care, pre-and post-hospitalisation medical expenses, OPD expenses, ambulance, day care treatment, organ donor cover, chemotherapy, and radiotherapy.
• Guarantees Financial Protection: With a critical illness cover in place, an individual can stay financially strong if diagnosed with a critical ailment. The policy will help the person bear the high medical expenses incurred due to long-term treatment of such illnesses, thus averting any financial implications.
• Allows Tax Benefit: The policyholder can look forward to saving tax under Section 80D on the premium paid on such a policy. One can avail of a maximum deduction of up to Rs 1 lakh if the proposer and insured are over 60.
• Annual Health Check-Up: A health check-up once during the policy year is provided at a network hospital or medical facility empanelled with the health insurance company.

Scope of Coverage under Critical Illnesses Health Insurance

Under critical illness, you get extensive coverage after you submit the diagnosis to the respective team. You will be covered for in-patient hospitalisation, diagnosis, and medication. You also bear the expenses related to air ambulance cost, chemotherapy and radiotherapy cover, dialysis cover, organ donor cover, second opinion, and annual health check-ups.

In-Patient Hospitalisation

If your inpatient hospitalisation in the network hospital lasts more than 24 hours, we cover your hospitalisation expenses. These expenses include your room charges, nursing expenses, ICU, surgeon’s fee, doctor’s fee, blood, oxygen, and OT (operation theatre charges).

Day Care Treatments

Daycare treatment means the treatment where you do not need to be admitted to the hospital for a day. Critical illness policy also covers your daycare treatment. Cataract surgery, chemotherapy, dialysis, or treatment or therapy requires hospitalisation for a day. So, if you are going for it, then you will get the amount for room rent, doctor’s visits, medicines, etc.

Pre and Post-hospitalisation

We cover your pre- and post-hospitalisation expenses, including diagnosis, treatment, and medicine expenses, along with doctors’ fees. Treatment costs, such as dialysis, daycare treatments, and surgeries, are also covered.

Additional Covers

The plan also offers additional coverage, such as air ambulance cover, international second opinion, alternative treatment, doctor on call, global coverage, and so on. You will also be reimbursed for these expenses.

Annual Health Check-up

Under a critical illness plan, you can also avail annual health check-ups. The package includes tests for blood sugar, urine routine, blood groups, kidney function, and ECG check-ups. This facility helps you to keep a track of your health.

Tax Exemption

Under section 80 D, of the Income Tax Act 1961, premium paid for critical illness health insurance either for self, dependent parents, spouse or children, is entitled for tax exemption. However, the taxable amount is subject to income, age, number of persons insured, and also income tax law.

What is the Difference Between Critical Illness Plan and a Health Insurance Plan?

While a Critical illness plan provides financial support for specific major illnesses, a health insurance plan is more comprehensive and covers a broad range of medical treatments and procedures.

7 Things to Consider Before Buying a Critical Illness Policy

You should opt for a comprehensive critical illness insurance policy. It can protect you from financial loss. Selecting & choosing the right critical illness insurance policy is very crucial; let us discuss 7 things to consider before buying a critical illness policy:

• Check How the Critical Illness Plan Works: Check that under the critical illness plan, you get the lump sum amount after you submit the diagnosis to the insurance company. You can pay for treatment, hospitalisation, medicines, and doctor’s fees out of it.
• Look for Maximum Coverage: When you are looking for the suitable health insurance, you should look for the critical illness cover that provides you maximum coverage. Ideally, a sound critical illness cover includes pre and post-hospitalisation expenses, diagnosis expenses, treatment, and medication.
• Premium: Premium is the sum of money that you have to pay to the insurer against the critical illness plan after specified intervals. You can opt for a plan that protects you from financial losses and supports you in your hard times.
• Check Exclusions: It is essential to check the exclusions before buying critical illness health insurance. Proper information about situations that the insurance company does not consider is essential.
• Waiting Period: It is advisable to ask for a waiting period before buying a critical illness plan. Critical illness is covered after 90 days of the policy period, and pre-existing diseases are covered for 48 months.
• Payout Structure: Understand how the payout works in the event of a claim. Some policies offer a lump sum payout, while others may provide monthly benefits. Compare these options and consider which would work best for your financial needs.
• Riders and Additional Benefits: Some critical illness policies offer additional benefits or riders, such as coverage for hospital stays, surgery costs, or the ability to convert the policy into a whole life or disability plan. Evaluate whether these extras would benefit you and whether they add to the cost.

Read More: 7 Things to Consider Before Buying a Critical Illness Policy

In a Nutshell

Thus, a health insurance plan for Critical Illness is very helpful. It gives you financial assistance to bear your hospitalisation and treatment costs. You can opt for a critical illness plan offered by Care Health Insurance that covers around 32 life-threatening diseases and has a network of 24800+ cashless healthcare providers across the country. So you can get the best possible treatment and focus on your recovery with peace of mind.

Disclaimer: Underwriting of claims for critical illness is subject to policy terms and conditions. Please refer to the policy brochure to verify the policy benefits and terms and conditions correctly.