Changing lifestyles and growing stress levels have resulted in an onslaught of diseases and ailments in people of all ages. This in turn has boosted the demand for medical and healthcare facilities whose costs have been skyrocketing. Traditionally a health insurance policy was adequate to cover the cost of funding health emergencies but increased hospitalisation and medical costs have highlighted the need for additional insurance cover especially in the case of serious ailments like cancer or heart problems or multiple sclerosis. Several life insurance companies now offer additional riders for covering critical illness and disabilities to allow a policyholder to have enhanced coverage.
What is Critical Illness?
Critical illness refers to serious medical conditions or diseases like cancer, kidney failure, heart attack or other heart-related problems, organ failure, multiple sclerosis, primary pulmonary arterial hypertension or paralysis, and coma. Insurance companies also offer coverage for corrective procedures like bypass surgery, heart valve surgery, organ transplantation, or Aorta graft surgeries. The treatment for these illnesses is quite expensive and long. The cost of treating these illnesses is not limited to hospitalisation but frequent hospital or doctor visits, expensive medicines, and much more.
The bills for the treatment of problems like cancer and heart trouble can run into lakhs owing to expensive medicines and treatment procedures like chemotherapy and radiotherapy. Most health insurance policies cover only the hospitalisation expenses making it difficult for a person to get the full treatment. Inadequate insurance coverage to treat these critical illnesses can prove to be catastrophic for your finances and result in the erosion of your savings. To avoid such a situation, you should consider buying additional insurance cover for treating critical illnesses and compensating for the resultant loss of income or employment.
What is Critical Illness Cover?
Life insurance policies provide death cover and involve payment of the death benefits to the nominee or the beneficiary of the policyholder upon the latter’s death. However, a critical illness cover includes the payment of a lump sum amount to the policyholder for the treatment of a critical illness. Some insurance providers may offer to pay the sum assured in regular monthly instalments for a specific number of years. The critical illness cover gets terminated immediately on the payment of the first critical illness benefit. Some important features of this cover are:
- It is applicable for more than 30 critical illnesses that require long and expensive treatment.
- The coverage is only for the diseases or illnesses that are included in your plan. This list can vary from one insurance company to another.
- The payment is generally lump sum for the treatment of the critical illness.
- The claims are processed quickly following the submission of the diagnosis and related medical reports.
- The policyholder can use the benefits for treatment plus to compensate the loss of income.
This cover can be purchased by paying an additional premium or in some cases life insurance policies may include a critical illness cover by default. The premium amount and other details can be finalised with the help of a life insurance calculator.
Choosing the Right Critical Illness Cover
Choosing the right life cover with critical illness coverage is important to achieve your objective of being able to fund the costs of getting a critical illness treated as well as compensating for the loss of income due to it. Some considerations while buying a critical illness cover:
- Ensure that the sum assured is adequate to help you meet all the treatment expenses as well as loss of income if any.
- Taking a cover at a young age will ensure that you can get a higher sum assured by paying lower premiums.
- Go for a plan that covers more number of critical illnesses.
- A plan that comes with a high age limit of renewal will help you maximise the benefits of the cover.
- Do check the inclusions and the terms of the critical illness cover to avoid any kind of disputes or disappointment at a later stage.
To conclude, you should go for a critical illness cover to ensure the necessary funding for treatment of life-threatening diseases and compensation for loss of income due to them. You can also avail of the tax benefits (under Section 80D) available on premiums paid for such a cover.