What is Critical Illness Insurance?

As humans, we do not have control over several things including our health, future, and wellbeing. While we cannot gain complete control of these things, we can build a provision to help protect loved ones against unforeseen situations and soften the blows. For instance, individuals with a history of medical illnesses and critical disorders can ensure they have robust financial protection to rely on in case of unforeseen medical emergencies. In this regard, having critical illness insurance coverage can help individuals build a financial safety net to meet the cost of medical emergencies. 

In fact, comprehensive critical illness insurance coverage can help seek required medical treatment without fearing straining their savings or emergency fund. It will also help their family members to use the cover amount to meet obligations comfortably even when there is a gap in income arising due to the insured’s diagnosis and treatment. However, the success of such a plan will depend on the insurance coverage and its scope. This makes it important to check the key features of critical illness insurance to understand whether the same would prove effective in helping them meet unforeseen medical emergencies.

Critical Illness Insurance Cover – In Brief

This insurance plan is designed to provide financial protection to the insured against the cost of treating critical Illnesses. Under this insurance plan, the insurance company disburses a sum of money to the insured in the event of them getting diagnosed with a critical illness covered by the policy. Typically, a critical illness insurance plan covers most of the key critical disorders, including cancer, renal failure, cardiac disorders, stroke, and more. However, it is important to check the list of diseases covered under the policy to ensure you avail coverage against specific conditions that have a history of occurrence in your family. Having critical insurance could prove more useful as a basic health insurance policy does not necessarily extend coverage for critical ailments like stroke, paralysis, or cancer. This is why it is important to look for a comprehensive critical illness cover with wide coverage and a simple claim process.

Should You Buy A Critical Illness Plan If You Have a Mediclaim Policy?

Given the soaring cost of medical treatment and inflation, an individual could never have enough coverage. The unpredictable nature of human life and health is such that even when one has prepared for medical emergencies, they are vulnerable to ailments. This is why it is crucial to have comprehensive plans that can help cover more health-related concerns and prepare better for such situations. Nowadays, when medical inflation is soaring out of control individuals with a basic health plan are no longer enough to build suitable medical coverage. In this regard, comprehensive plans like critical illness cover can prove useful.

The two most important reasons to opt for critical illness coverage are –

  • High coverage against critical illnesses

By purchasing a critical illness insurance cover individuals can build a cover for illnesses that are not typically covered under regular health plans. This will help them with financial security against a wide range of diseases and medical emergencies and help them avail of timely medical treatment without straining limited savings or dipping into another important corpus like retirement funds.

  • Security of  Savings

The high medical bills tend to dent one’s savings, especially if they do not have a critical illness cover or provision for health-related emergencies. In addition, the loss of income during one’s diagnosis, treatment, and surgery, further aggravates their finances and puts pressure on the entire family’s monetary standing. In such situations, individuals tend to dip into their savings or other corpus meant for future goals or obligations to foot the medical bill to meet the cost of living. Often this pushes them to resort to debt or deplete their savings, which again would hamper their ability to meet future emergencies.

Major Benefits Of Critical Illness Insurance 

The numerous features and benefits of a comprehensive critical illness insurance plan make such a protection policy crucial in this age –

Extends financial support 

A critical illness insurance policy serves as a reliable ally during an emergency. Such a plan not only helps individuals meet the required financial aid to account for treatment costs but also reduces an individual’s family’s concern about the income gap. The support helps them focus on their recovery instead of worrying about the cost of treatment and how their family would meet the daily living expenses. Typically, a critical illness cover disburses a lump sum amount to the insured enabling them to pay for the medical bills and support their daily expenses.

Extensive coverage

Most critical illness insurance plans are designed to provide comprehensive protection against a list of Illnesses, including kidney disorders, cardiac disorders, cancer, stroke, and paralysis. Such an exhaustive list of coverage offers financial protection against a lot of diseases, allowing individuals a sense of peace about their protection. 

Affordable premiums

Critical illness insurance plans can be availed at an affordable premium. This feature makes it accessible for a lot of individuals, allowing them to prepare against unforeseen medical situations. Notably, the exact amount of premium tends to depend on several variables, including an individual’s age and desired coverage. They can use an online life insurance premium calculator to determine how the same would influence the premium and help them plan their insurance better.

Tax benefits

Besides a comprehensive cover against critical condition illnesses, critical illness insurance also offers tax benefits to individuals. Section 80D of the Indian Income Tax Act allows a deduction of Rs. 25000 on health insurance premiums. The same extends up to Rs. 50,000 for senior citizens.

Substitute income

A long-term critical illness often becomes the reason for loss of income for the insured. This not only adds to the mental pressure of the insured but also increases their financial constraints. However, the lumpsum amount acts as a substitute for the lost income stream while they are recovering. It allows the family to pay for medical treatment and tide over living expenses smoothly while the breadwinner of the family bounces back on their feet. 

This way a critical illness cover helps individuals to prepare for medical emergencies and safeguard their financial future. Individuals must check the features and terms binding them carefully to make an informed decision.

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