Critical Illness Insurance

A Critical Illness Insurance Plan is a benefit based insurance policy which provides a lump sum payout if you are diagnosed with a critical illness listed in the policy document after the waiting period





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What is Critical Insurance Plan?

In our current sedentary lifestyle with wayward food habits, we can easily succumb to critical illnesses. And they can be devastating on our finances. Having a Critical Illness Insurance plan can be a lifesaver during such circumstances. A Critical illness Insurance plan is a type of health insurance which pays a lump sum amount to the policyholder if he diagnosed with critical illnesses as defined in the policy. 

Cancer, stroke, sudden heart attack, burns, kidney failure are some of the critical illnesses whose treatment would cost you exorbitant amount of money. If not treated at the right time, it may even cost your life. Buying a Critical Illness Insurance plan is the foolproof way of saving yourself from the financial hassles that may come with critical illness.

Features of a Critical Illness Insurance Plan

  • Coverage against Critical illness – It provides coverage against major critical illnesses like cancer, heart attack, renal failures etc
  • Lump Sum Payout – It provides lump sum payout for the treatment of critical illness
  • Easy Claim Processing – The policyholder can easily avail the claim by submitting the diagnosis report
  • Waiting Period – Coverage is provided at the end of waiting period. Normally, the waiting period is 90 days but it may differ from insurer to insurer
  • Affordable Premium  – The premium for critical illness insurance is relatively low and is very affordable

Tax Benefits

Critical illness payout is tax-free under Section 80D of the Income Tax Act. You can avail a tax exemption of upto Rs. 15000 and senior citizen can avail a benefit of Rs. 20000 under the same section

Who should take a Critical Illness?

Given the sedentary lifestyle, everyone is prone to life threatening critical illness like cancer, stroke etc. Therefore, everyone must consider opting for a critical illness insurance plan. We have listed below high-risk category that can benefit from this Insurance.

Family of Critical Illness: Usually, critical illness is genetic. People who have a history of critical illnesses like cancer in their lineage are at a higher risk of suffering it. So, it is better to be safe than sorry, by opting for this Insurance

Sole Breadwinner: If you are the sole breadwinner of the family, it is important that you opt for this coverage as managing the medical expenses will be tough if you do not have one

High-Pressure Job: If your job environment is strenuous, then the chance of catching a critical illness is very high. For people employed in high-pressure and high-risk, having critical illness insurance is a must

Illnesses Covered in a Critical Illness Insurance

Given below are the some major critical illnesses that are covered by the Critical Illness Insurance policy. Please note that this is not an exhaustive list and different companies cover various critical illnesses.

  • Cancer upto a specific stage
  • Heart attack (first attack)
  • Open Heart Surgery
  • Heart replacement or valve repairing
  • Kidney Failure that requires daily dialysis
  • Stroke
  • Multiple sclerosis
  • End-stage liver disease
  • Major Burns
  • Loss of speech or sudden deafness

Exclusions in a Critical Illness Policy

Generally, the critical illness policies do not cover the following cases:

  • Diagnosis of critical illness within the waiting period
  • Dental Procedures
  • Diseases not specified in the policy documents
  • Hormone replacement treatment
  • Sexually transmitted diseases
  • Infertility treatment
  • Illness developed due to consumption of intoxicating substances like tobacco, smoking, drugs, and alcohol
  • Illness caused due to terrorism, war, or any nuclear activity

How to determine the right coverage amount?

Here are some vital factors that you need to take into account to determine the right coverage amount while applying for critical illness insurance,

Location – The sum insured depends on the area you live. For example, if you live in tier 2 towns where the cost of living is low, then you can opt for a lesser coverage. On the other hand, if you live in major metropolitan city like Bangalore or Chennai, you must opt for a higher coverage

Age – If you are getting older, then you must consider taking critical illness insurance policy, as the chances of critical illnesses are high. To tackle them effectively, you must opt for higher amount coverage

Profession – If you are working in high pressure environment, then you must definitely opt for a critical illness insurance plan as the chances of catching life-threatening diseases are high

Lifestyle – Your lifestyle also plays a vital role in determining the right coverage amount. People having habits like smoking or drinking are more likely to be diagnosed with illness like cancer or stroke. So, it is better to opt for a plan with high coverage amount

Waiting Period – All Health Insurance plans come with a waiting period, which means that the policyholder can avail the coverage only at the end of the waiting period. Go for the policy with a low waiting period

Claim Process for a Critical Illness Insurance

If there is a need to file a claim, then follow the below-mentioned procedures for reimbursement,

  • Submit the Duly Filled Claim Form
  • Photocopy of the ID card
  • Medical certificate which confirms the diagnosis of critical illness

For Cashless Claims:

It is applicable if you take treatment in a network hospital,

  • Inform the Insurance Company about the hospitalization and  submit your health insurance card and ID proof at the hospital
  • Fill up the pre-authorization form and the hospital will share it with the insurance company
  • On approval from the insurance company, you can avail the cashless treatment
Premium amount for Critical Illness Insurance depends on various factors – age, sum insured, policy tenure, medical history, etc.
Every individual has different healthcare needs. You have to factor in diseases running in your family, your age, and occupation among other things to select the best critical illness insurance plan.
Yes, the premium you pay towards this plan is eligible for tax exemptions under section 80D of IT Act 1961.
A Claim form, documentary evidence of your diagnosis of critical illness, and all the medical reports.
No, you cannot increase the sum insured in the middle of the policy year. You can do so only at the time of renewal.