Common Illnesses Covered In Critical Illness Insurance

What is Critical Illness Insurance?

Critical illness insurance is an additional cover that an individual can purchase on their standard policy. Also known as riders, these plans offer comprehensive financial protection during medical emergencies.

Since these situations typically incur high treatment costs, such plans pay a lump-sum amount to meet those expenses.

    There are a few general conditions under a critical illness plan, those being:

• The assured sum is separate from the base value in the original insurance policy
• The amount is disbursed regardless of whether the policyholder undergoes treatment
• Only applicable if the insured is diagnosed 90 days after policy commencement
• Benefits are payable only if the policyholder survives for 30 days post the initial diagnosis
• The covered illnesses depend on the insurance provider

Despite the limitations, critical illness insurance coverage is the most effective way to safeguard yourself and your loved ones from unexpected medical emergencies. This is primarily due to how the payout works.

For example, the insured does not need to submit hospital bills as proof of expense. Instead, a simple diagnosis is enough for the policy provider to disburse the assured sum. In short, if the prognosis is unfavourable, the policyholder can use that amount to cover any financial liabilities for their family.

What Qualifies as a Critical Illness?

Any severe health-related issue that has a debilitating effect on someone’s lifestyle or source of income qualifies as a critical illness. While the covered conditions depend on the offered policy, a common thread associated with such diseases is the significant treatment expenses they incur.

Who Should Consider a Critical Illness Policy?

Critical illness insurance can seem like an unnecessary cost to some. However, they provide much-needed financial help in dire situations.

You should purchase critical illness insurance plans if you:

• Are the sole breadwinner in your family
• Have a variable source of income
• Lack of the necessary funds to cover treatment expenses in case of major surgeries
• Have a family history of cancer, heart-related issues or other hereditary conditions

The final point is especially relevant since some genetic diseases, such as Alzheimer’s or cancer, manifest later in adulthood.

Should You Get a Critical Illness Cover If You Already Have a Standard Insurance Policy?

To understand the necessity for a critical illness insurance plan, it is crucial to grasp how it differs from a regular health insurance policy.

A standard cover or plan merely caters to your medical bills. The money does not actually come to you. It goes to the healthcare institution.

On the other hand, a critical illness cover is a lumpsum that your insurance provider gives you. The amount can be used to pay for your treatment costs, household necessities or anything else.

As such, it is best to opt for both these policies together. That will give you comprehensive coverage.

That said, here are some other points you need to consider:

Critical Illness Insurance Vs. Standard Health Insurance: How Do They Differ?

While it shares some similarities with standard plans, a critical health insurance rider is specifically meant for life-threatening conditions. Meanwhile, regular policies provide comprehensive healthcare coverage.

Some other distinctions between the two are as follows:

Why Are Regular Health Insurance Plans Insufficient to Tackle Critical Illnesses?

As implied earlier, the primary difference between standard insurance plans and a critical illness policy is how they cater to emergencies.

A regular health insurance policy pays your medical expenses directly. A critical illness cover gives you a lump sum amount you can use at your discretion. Consider the example below to understand this better:

Let’s assume there are two plans. One is a standard health insurance policy, while the other is a critical health cover. Both are worth 3,00,000 INR.

Now, the regular policy covers up to 3,00,000 INR in medical expenses exclusively. When the policyholder avails of the plan, the assured amount will be used to pay hospital or surgery bills. Anything beyond that will not fall under its purview.

In other words, that 3,00,000 INR will not be payable to you. It will go to the healthcare providers.

Conversely, a critical health insurance rider will be disbursed to you. So, you get the entire 3,00,000 INR and can use it as you see fit, either to cover hospital expenses or meet your household needs.

That distinction is precisely why standard health insurance policies are insufficient to tackle life-threatening diseases. Thus, it is best to supplement these variants with an additional rider.

What Illnesses Are Covered by Critical Illness Insurance Policies?

Below is a list of the 36 conditions covered by critical illness insurance plans.

Even so, note that the diseases mentioned below are a compilation of the issues found across multiple riders. So, all of them may not be applicable under a single policy.

What are the Benefits of Critical Illness Insurance Policies?

A critical illness policy is a strategic and pre-emptive financial safeguard for potential medical emergencies. While that is one of the most prominent features and benefits of such plans, here are some other perks that the insured can avail of:

1. Dedicated Financial Coverage in Medical Emergencies

   Several types of critical illness can prevent an individual from working, resulting in a loss of income. The issue becomes even more concerning if they are the sole breadwinner in the family.
   That aside, such diseases often have exorbitant treatment costs, usually amounting to 5,00,000 INR or more. As such, a critical health insurance plan can mitigate the impact of both of those problems and, in some cases, entirely negate them.

2. Relatively Inexpensive Premiums

   If you buy critical illness insurance coverage, you will pay relatively low premiums. This is especially useful, considering the high treatment expenses for life-threatening diseases and conditions.
   Put simply, in exchange for a small sum, you can avail of significant benefits and financial protection.

3. Tax Exemptions & Deductions

   Under Section 80D of the Income Tax Act, premiums for critical illness or standard health insurance policies are exempt from taxation.
   In addition, policyholders can claim deductions worth up to 25,000 INR for critical illness insurance plans that cover their parents, spouse or immediate family members. For senior citizens, deductibles go up to 50,000 INR.

4. Additional Protective Layer to Existing Health Insurance Plans

   Standard health insurance plans are the go-to tools for mitigating financial liabilities in emergencies. Adding a critical illness cover ensures comprehensive coverage while allowing you to manage non-medical expenses better.
   Since you can use the payout at your discretion, these riders can help you meet peripheral monetary obligations and responsibilities.

What Should You Consider Before Choosing a Critical Illness Insurance Cover?

People often consider a policy to be the best critical illness insurance if it covers several medical conditions. That, however, is a misconception. Consider the example below to understand this better.

Insurance Provider X offers coverage for 30 diseases, excluding cancer. Meanwhile, Insurance Provider Y caters to only 5. However, their rider includes cancer. Now, an individual with a family history of cancer will naturally benefit more Insurance Provider Y’s plan.

Put simply, the number of the conditions covered under a policy is not relevant. What really matters is if it lists the diseases that you are vulnerable to.

Apart from that, it also helps to look at the following elements:

1. Sum Assured

   Since a critical illness plan provides financial coverage for major diseases, opting for an adequate assured sum is crucial. So, you must not make the mistake of purchasing a rider merely because it has lower premiums. It is best to discuss the specifics of the payable amount with your insurance policy provider.

2. Age

   Like standard plans, purchasing a critical illness policy is more cost-effective when you are young. Since health insurance premiums are based on actuarial life tables, this can result in you paying a relatively lower sum.

3. Illnesses Covered

   As mentioned earlier, it is vital to examine the covered critical diseases. However, avoid basing your decision on the actual number of conditions listed under the plan. Instead, look at your medical records or family history to determine which issues you may potentially develop in the future. This will lead to lower payable premiums.

4. Exit Age

   Exit age refers to a predetermined point beyond which you cannot renew your critical illness insurance coverage. Nonetheless, this varies across insurance companies. Discuss this with your preferred policy provider to better understand any conditional requirements.

5. Survival Period

   All critical health insurance plans have a survival period, which is the duration that the insured must live for post-diagnosis to avail of the payable sum. In most cases, it is 30 days. However, depending on the policy provider, this can go higher.
   It is best to opt for a rider with a short survival period.

6. Inclusions & Exclusions

   A critical illness plan will have specific inclusions and exclusions. For instance, while the rider may cover cancer or heart attacks, the insured may not receive the benefits if it is a disease due to substance or alcohol abuse. Similarly, pre-existing issues will not have coverage. It is advisable to examine all these conditions before purchasing the policy.

Wrapping Up    

As of today, most people are aware of how unexpected health issues can result in unforeseen challenges. That is precisely why they opt for health insurance plans. However, these policies may not cover all potential circumstances.

That is where a critical illness insurance rider can help. From eliminating financial liabilities in medical emergencies to ensuring that your family is well-cared for when you cannot do it yourself, they can be instrumental in securing your future.

To know more about these policies or other health insurance plans, visit the PNB MetLife website.

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