Critical Illness Insurance – Cover & Benefits
In midst of lockdown getting bored one of my close friends called up to check with me if Critical Illness cover is same as Mediclaim. She had heard one of her colleagues mentioning it. It got me thinking…
Majority of us tend to confuse critical illness policy with a Mediclaim policy or we are not aware of this product.
Mediclaim policy reimburses the hospitalization bill, whereas the critical illness policy pays out a lump sum amount (sum assured) on the diagnosis of critical illnesses covered under the policy. In short Critical Insurance policy are fixed benefit plans where lumpsum is paid to the policy holder in case of diagnosis of critical illness irrespective of hospital expenses.
Medical treatment costs are getting expensive and medical inflation is often quoted in double digits. A simple Mediclaim policy is not enough to cover expenses relating to major diseases.
Some people may argue against Critical Illness cover but we must note that our sedentary lifestyles and stressful lives are giving rise to all kinds of illnesses, most of them critical in nature. Not only the number of people diagnosed with critical illness are increasing, the age at which people are being diagnosed is decreasing.
Features of Critical Insurance Plans:
- Coverage is provided for up to 36 major critical illnesses. This may vary from one insurance provider to another
- Lumpsum payment -the insurer provides the lump sum payment for the treatment of covered illnesses
- Easy claim processing
- Usually the coverage is provided after the end of the waiting period
- Part of the lump sum can be used as income replacement
Critical illness cover offered has two options – Standalone policy and critical illness rider. A standalone policy is a plan that provides comprehensive coverage for critical illnesses. The critical illness rider is an optional add-on feature you buy along with your health insurance policy or life insurance policy. Both standalone policy and rider provides coverage against critical illnesses. The choice between the two depends on one’s requirements, budget and family health history.
Difference between standalone policy and critical rider:
*Standalone CI can be bought from Life insurance/General insurance. In our experience Separate CI plans of life insurance companies are highly complex, restrictive and have several conditions attached to them. Getting a CI plan from a non-life insurance company or a health insurance company may therefore be a better option. A standalone policy offers more flexibility in choosing the sum insured and larger covers as compared to riders.
How to select Critical Illness cover?
- List of critical illness covered-You must aim to but policy which covers maximum number of critical illnesses. There is no harm in consulting with your Family doctor. Being your family Doctor, he/she will be well versed with your family and your health history.
- Size of the cover-Carefully mull over the average expense of treating critical illnesses when evaluating the size of the cover. Factor in inflation. Take a higher cover if possible.
- Look for higher renewability-Compare different critical illness insurance plans and consider the policies that offer higher renewability.
- Look for tenure and sum insured- Look for policy that offers longer tenures and higher sum insured
- Look if there’s cap on claims-Most critical insurance plans have a cap on claim amounts depending on what ailments are you making a claim for. Look for a policy that offers generous cap on claim amounts.
- Survival clause-Most critical illness policies have a clause that the policy holder must survive for a specific number of days post the diagnosis of the illness in order to make a claim. So, look out for a policy that involves minimum number of days that the insured needs from the day of diagnosis.
- Check out the waiting period-Typically there is a waiting period for pre-existing illness to be covered by the policy. Look out for a policy that offers minimum waiting period.
- Take a careful look at the policy details. It’s important to read through the exclusions mentioned in the policy document and as mentioned earlier consult your family doctor on the policy language/coverage/waiting period.
Thinking about critical illness? Want to know more about critical illness or how it can be useful for you during this emergency time. Feel free to write us on firstname.lastname@example.org