Critical Illness Insurance

What is Critical Illness Insurance?

A critical illness insurance cover offers protection against a whole list of serious illnesses. An illness that can potentially cause the policyholder’s death is termed as critical. It can be cured, but the treatment is often expensive and complicated. A critical illness insurance cover offers protection against all the financial challenges faced when a person is diagnosed with a critical illness such as cancer, heart failure, organ failure, etc.

Understanding a Critical Illness Insurance Cover

Critical illness insurance is available in two forms:

1. Stand Alone Policies
2. Riders Attached to Health or Life Plans

You can opt for any one of these options if you want a critical illness cover. The cover promises to pay out a sum of money if you get diagnosed with a critical illness after you buy the plan. The compensation is pre-decided. You are given the money and then you are free to use it in any way you please. The insurance company will not ask you to justify how you spent the sum assured revised against the critical illness cover. The common ways in which people utilise this fund is:

1. Paying for treatment.
2. Paying for travel and lodging expenses to go abroad to get treated.
3. Using it as an income replacement when the critical illness makes it impossible for the policyholder to continue working.
4. Using it to set up a fund for the family to use after the policyholder’s demise.
5. Using it to clear outstanding loans and debts.

A critical illness cover is, therefore, a very handy way to deal with the financial challenges that show up when a person is affected by a serious illness.

Buying Critical Illness Insurance

There are some very simple ways in which critical illness insurance coverage can be bought. The procedure will depend on the type of cover you buy, that is a stand-alone policy or a rider. Let us take a detailed look:

Opting for a critical illness insurance plan – When you opt for a critical illness insurance plan, you are given protection only for critical illness and you do not get any other insurance cover in it. Buying a critical illness insurance plan is like buying any other insurance plan. You need to do your research and narrow down on the options available. Once that is done, you need to compare the options to see which is the best choice for you. Many insurers sell these plans online, so you can make a purchase online. After that, you need to pay the premium on time and keep the plan active. If you get affected by a critical illness in the future, you can make a claim and get the compensation. The plan will terminate thereafter.

Opting for a critical illness insurance rider – The other option is to buy a critical illness rider with either a health insurance policy or a life insurance policy. This is common health as well as life insurance rider. Most of the medical insurance plans and life insurance plans, including the term plans, offer the option of buying a critical illness rider. You need to pay an extra premium for this rider. Once you have the rider, you get the same benefits as a stand-alone critical illness cover.

These are the two ways in which you can buy a critical illness cover for yourself or your family members.

Who Needs Critical Illness Insurance?

Life and health are both unpredictable these days. Diseases such as cancer and heart problems have become very commonplace. You never know when an illness can strike. So it is a good idea for everyone to have critical illness insurance. However, some people who have a family history of critical illnesses such as cancer or Alzheimer’s disease, benefit more by getting this cover. Also, people who maintain poor lifestyles, are obese and generally less healthy may consider getting this cover.

List of Critical Illnesses

While every insurance provider has a different list, here are the common ailments that most insurers in India list under the category of critical illnesses:

1. Cancer
2. Angioplasty
3. Heart Attack
4. Aorta Surgery
5. Cardiomyopathy
6. Primary Pulmonary Hypertension
7. Open Chest CABG
8. Blindness
9. Chronic Liver disease
10. Chronic Lung Disease
11. Kidney Failure requiring regular dialysis
12. Apallic Syndrome
13. Brain Tumour
14. Brain Surgery
15. Coma of specified Severity
16. Major Head Trauma
17. Permanent Limb Paralysis
18. Major Organ or Bone Marrow Transplant
19. Stroke
20. Alzheimer’s Disease
21. Motor Neurone Disease
22. Multiple Sclerosis
23. Muscular Dystrophy
24. Parkinson’s Disease
25. Loss of Independent Existence
26. Loss of Limbs
27. Deafness
28. Speech Loss
29. Medullary Cystic Disease
30. Systemic Lupus Erythematosus
31. Major Burns
32. Aplastic Anaemia
33. Poliomyelitis
34. Bacterial Meningitis
35. Encephalitis
36. Progressive supranuclear palsy
37. Rheumatoid arthritis
38. Jakob disease
39. Fulminant Viral Hepatitis

Do remember to check with your insurer before you buy a critical illness insurance cover. If you want coverage for a specific illness, make sure that illness is covered in the plan or rider you are buying.

Benefits of Critical Illness Insurance

There are many ways in which you can benefit from buying a critical illness insurance cover. Here are a few of them:

Financial Security – Some critical illnesses such as Alzheimer’s Disease or major organ failure can lead to a person’s rapid loss of health and subsequent death. He may not even have enough time to build up a corpus for his family or clear his existing debts. At such a time, the compensation from a critical illness cover proves to be tremendously handy.

To Get Treated – Many people prefer to go abroad to get treated when they develop a critical illness. However, this is very expensive. The medical costs in a country such as the US or Singapore are extremely high. Then, travelling and living there is expensive too. The critical illness insurance cover proves to be helpful in providing the finances needed at such a time.

Investing in a critical illness insurance cover is a wise thing to do. So if you feel your health is fragile or you simply want a greater degree of assurance for yourself and your family members, get this cover when you buy a health or life cover or get it as a separate policy.