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Everything you need to know about Critical Illness Cover

Health is Wealth and in our good health, we tend to forget the uncertain and unforeseen health issues that might come anytime, putting a big challenge on our physical, emotional and financial situation. With a regular health insurance, you can cover the basic health requirements but this will not hold good for incidental cases where an unforeseen health emergency or critical illness surface up suddenly.

What is a critical illness policy?

A Critical Illness (CI) can be defined as any health condition that imposes a life-threatening and debilitating effect on a person's lifestyle and that may result in the loss of future earning potential of the affected individual.

Why should one take a CI policy and how does it work?

Critical illness insurance policy provides the necessary cost coverage during sudden illnesses without jeopardizing the financial standing of you. Critical Insurance coverage makes probably more sense for the earning members of the family considering the pivotal role they play.   Critical Illness insurance covers the medical costs of treatment and hospitalization along with a lump sum compensation to carry out the necessary expenses of day to day life in case of some disability due to illness.  

Who should take a CI policy?

Since there is no certainty or defined age of getting some critical illnesses, it is advisable to be covered under critical Illness policy. Modern day lifestyle is responsible for certain ailments at a much earlier stage of life.  This is more imperative for people who have a strong family history of diseases to take this insurance. Also, women can be covered under a Critical Illness policy that customizes certain kind of cancers and other women-specific illnesses. Coverage will be higher as the age progresses for all insured.

Standalone CI plan vis-a-vis CI rider

A critical illness policy can be bought as a standalone policy or can be taken as an add-on rider to the regular health insurance policy. However, a standalone policy is more beneficial due to comprehensive coverage of ailments and the costs. However, a critical illness policy does not cover any illness that is not specified and included in the policy. The advantage of standalone policy is it is independent of a regular insurance policy when it comes to renewal and gives better flexibility. Inclusions in the policy Depending on the policy coverage and the insurer, the number of illnesses covered by companies varies from few to many (from a dozen to over 30 illnesses). The illnesses that generally covered under critical illness policy (but not limited to) are:  

Cancer

First Heart Attack

Coronary Heart Disease

Heart Valve Surgery

Surgery to Aorta

Stroke

Kidney Failure

Aplastic Anemia

End Stage Lung Disease

End Stage Liver Disease

Coma

Major Burns

Major Organ/Bone Marrow Transplant

Multiple Sclerosis

Fulminant Hepatitis

Motor Neuron Disease

Primary Pulmonary Hypertension

Terminal Illness

Bacterial Meningitis

Exclusion from Policy

The following conditions (not limited to) are not covered by the policy:

Any pre-existing conditions or diseases at the inception of policy

Medical treatment required following any criminal act

Treatment received overseas

Hospitalization expenses within a certain period of inception of policy for the diseases which are otherwise covered under the policy. This clause is not applicable for subsequent renewals

All the illnesses that are not mentioned in the policy.

Difference between a CI plan and a regular health plan

Critical Illness insurance gives distinct benefit in certain illnesses where the cost of treatment is much higher. It is a defined-benefit plan and the entire insured amount is paid off. Thus it works as a Survival plan for a critical illness beyond the course of treatment.  Sometimes extending the general health insurance policy works towards managing critical illnesses within certain limits. However, regular Mediclaim pays off only the amount that is spent during treatment and no lump sum is offered beyond treatment.

Coverage amount and cost

The right coverage depends on the age, Lifestyle and the medical history of each individual.  You need to compare and do a market survey for the insurers regarding what they are offering under CI plans. The coverage amount starts from as low as 1 Lac and goes up to 15 lacs for different plans of different insurance companies. Premium amount varies based on coverage. The premium payment has tax benefits under Section 80D.

Claim Process for CI Plan

Most of the Critical illness policies come with an initial waiting period of 60 to 90 days and a 30 days survival period after inception which means the claim for critical illnesses could be made only if the insured survives 30 days after buying the policy.  The insurance company pays the claim after the survival period.

Claims can be registered by contacting the insurer. Certain documents are required for the claim like the completed claim form, medical certificate confirming the critical illness, detailed discharge summary and the photo ID of the insured. The policy is renewable for lifelong, but if a claim is made and the assured payment is received, the policy is considered terminated.
If you like to know more, please follow this article: Is there any need for critical illness plan for today's youth?

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