What precisely is Critical Illness Insurance? Should I purchase it?

When Manju's husband was diagnosed with a brain tumor, they were both devastated. To make matters worse, they only possessed a medical insurance policy that covered hospitalized costs except for serious ailments. He was also unable to work due to the severity of his sickness. As a result, they had to deal with both financial and health problems because they lacked a critical illness insurance policy that would have provided an additional safety net.

Many people, including Manju and her husband, are unaware of the advantages of critical illness insurance coverage. Even if they are aware, they are unable to decide whether or not to purchase one.

Read on and learn more about critical illness cover and its significance in modern life.

Critical illness insurance: What is it?

Life-threatening illnesses, including cancer, renal failure, liver transplant, etc., are covered by a critical illness insurance policy. When a critical illness covered by the health plan is diagnosed, compensation is given in a lump payment. This one-time payment can be used to cover the cost of medical care. In the majority of situations, there is a 30-day surviving period, after which the claim is resolved.

Critical Illness insurance benefits

Take a look at the advantages of critical illness cover to help you understand:

Payment in a Lump Sum — Regardless of the cost of your hospitalization, the insurer will pay the entire amount insured in a single lump sum. You can use this to pay for any debts, medical charges, and treatment costs.

Simple Claim Process: The diagnosis reports alone can be used to process the claim if hospitalization is not necessary ( in most cases)

Less Waiting Time- Typically, there is a three-month waiting period ( in most cases)

Utilize Tax Benefits: Section 80D of the tax code provides benefits for critical sickness plans.

Critical illness insurance is necessary.

It is essential to get critical illness cover due to medical inflation and the increase in critical sickness cases. A breast cancer operation today can cost anywhere from Rs. 14 to 16 lacs. A liver transplant might cost anywhere between Rs. 25 and Rs. 36 lacs. These numbers make critical illness insurance nearly a given.

Is a Critical Illness Plan Right for You?

The number of people who get life-threatening medical diagnoses is steadily increasing. While the likelihood of having a severe illness is rising, the average age at which it strikes is progressively dropping.

Such terrible, deadly diseases are now being detected in people as young as 20 and 30. Thus, there is no predetermined standard for purchasing critical illness coverage. But in some situations, it's imperative that you think about getting a critical illness plan:

If the critical illness has a history in your family: Critical illnesses are typically caused by genetic factors. For instance, if you have a history of cancer in your family, your risk of developing the disease is increased. Get critical illness insurance coverage as a preventative precaution to enjoy a secure future and access the best care. Consider purchasing a critical illness plan if you are aware of your family's medical history.

If you are the family's sole provider of income: It is crucial to protect the entire family with critical illness insurance coverage if you are the sole breadwinner in the household. It is necessary if you don't want your loved ones to experience financial or emotional hardship after receiving a critical disease diagnosis. Additionally, critical sickness coverage compensates for lost wages in addition to the cost of treatment.

Should You Purchase a Rider or a Standalone Plan?

Critical illness insurance is offered by the best health insurance companies as a standalone policy or as a rider. The benefits of a rider are comparable to those of standalone insurance, but because the sum assured ranges from 50% to 100% of the basic policy, it is less expensive and covers fewer ailments.

For instance, if you have a health plan for Rs. 5 lakh, your critical illness coverage is only worth Rs. 2.5 lakh because it is computed at 50% of Rs. 5 lakh. Additionally, you can select a higher sum insured amount under a solo plan.

Therefore, choosing a separate critical illness policy will be a reasonable option if you are not seeking an economical solution because it offers substantial coverage. A standalone critical illness coverage worth Rs. 30 lakhs for a 25-year-old would cost about Rs. 15,000 per year. However, if money is tight, you could choose a rider plan.

To sum up

With the prevalence of life-threatening illnesses like cancer on the rise, obtaining critical illness insurance can ensure that both you and your family are recipients of the greatest medical care without having to spend all of your life savings.

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