Health Insurance: Should You Get Critical Illness Insurance?


With medical treatments becoming more and more expensive, it is important to take out critical illness insurance. The policy can be purchased either as an endorsement with a life or health insurance policy or as a standalone policy.

Insurance companies cover about three dozen serious illnesses such as cancer, kidney failure, major organ transplant, etc. Upon diagnosis of one of the listed critical illnesses, the insurance company will pay the full sum insured which will cover the cost of the specific treatment. Since the insured will suffer a loss of income due to the critical illness, the payout will help pay for treatment costs, financially support their family and immediately compensate for the loss of income. On the other hand, a health insurance scheme is a compensation scheme which pays the expenses (cashless or reimbursement) actually incurred.

You should keep in mind that critical illness insurance policies have a waiting period ranging from 30 to 90 days. Thus, if you already suffer from a serious illness, you will not be able to purchase the policy. However, you can buy the policy even if you suffer from certain lifestyle disorders such as hyperglycemia, high blood pressure which increases the risk of serious diseases. Policyholders benefit from a tax benefit of up to Rs 25,000 under Article 80 D of the Income Tax Act. Insurers offer a free examination period of 15 days from the date of receipt of the policy document in the event of serious illness.

Why buy?

If you have a family history of diseases such as cancer, coronary artery bypass surgery, etc., or if you suffer from lifestyle diseases such as diabetes, you must purchase adequate critical illness coverage at an affordable price. . The sum insured should depend on age, income and location. As a rule, treatments for serious illnesses are long-term. Thus, the sum insured must cover hospitalization costs, medicines and support the monthly expenses of the family in case you have to stop working to recover. Also, long-term financial liabilities such as loans, children’s education should be taken into account.

Ideally, the sum assured should be the insured’s annual income multiplied by the number of years he may need to recover. Before finalizing, read the terms and conditions and the list of exclusions. Select the policy that has a high renewal age limit to maximize benefits.

Autonomous or rider?

Ideally, one should buy it as a stand-alone policy as there will be a limit to the sum insured in an endorsement, which will be the same as the base policy. However, the premium will be higher in a standalone policy compared to an endorsement.


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