Critical illnesses are highly expensive to treat. Amidst the global economic crisis—brought in by the Coronavirus pandemic—the treatment of critical illnesses can burn a hole in your pocket. Under such circumstances, a carefully chosen critical illness insurance policy would relieve you and rid you of your financial worries.
Knowing your critical illness policy
A good critical illness insurance policy covers a maximum of the thirty-six critical illnesses, including cancer, cardiovascular disorders, stroke, kidney-related conditions, organ transplant, and paralysis.
Critical illness policies are quite different from other health insurance plan or mediclaim. A critical illness insurance policy covers or ‘insures’ a person with a lump sum amount equal to the sum insured, which is paid to the ‘insured’ when a critical illness afflicts him or her. It covers the cost of treatment, care, and recuperation, and often helps one repay loans taken on medical grounds. Furthermore, the plan pays the full sum insured irrespective of the hospital, where the covered patient is undergoing treatment. Critical illness insurance defines and fixes all pay-outs and benefits. A health insurance policy or mediclaim, on the contrary, is an indemnity plan that only reimburses the expenses that you have incurred.
Buying a Critical Illness Insurance Policy
You can buy a critical illness insurance plan from general insurance companies and, in some cases, from life insurance companies. When bought from life insurance companies, the policy may be added as a ‘rider’ or ‘add-on’ to the base life insurance policy. In such cases, you may come across two scenarios. First, the base life cover continues even after the critical illness rider is utilized. Second, if the base plan is terminated, the rider can be used anytime during the entire term. Your premium is often lower in the second case. Financial advisors suggest that it is a better choice to purchase a standalone, separate insurance plan for critical illnesses as those are rather simple and flexible in selecting the sum to be insured and offering wider coverage as compared to riders.
A Critical Illness insurance policy, purchased from any company, provides you with multiple tax benefits. For the ongoing financial year, plan holders, aged below 60 years, can avail tax benefits up to Rs 25,000 and senior citizens can avail tax benefits up to Rs 30,000 under Section 80D of the Income Tax Act, 1961.
The Waiting Period
The feature that makes critical illness plans stand out is that the insured person requires surviving for a waiting period that ranges upto 30 consecutive days after diagnosing the critical illness for making a successful claim. Furthermore, there exists a 90-day waiting period from the beginning of the policy to avail benefits. These plans usually do not cover a critical illness, diagnosed within the first 90 days, and death within 30 days following the diagnosis.
With the Coronavirus pandemic still looming over, a health insurance policy is a must for everyone. You need to select a health insurance plan that makes room for the addition of a Critical Illness plan or buy it separately for you and your family. Read the policy documents carefully and focus on the exclusions mentioned in the policy document. Consult your family doctor on the policy terms/waiting period/coverage to determine if it suits your requirements. Nowadays, many insurance companies have made their plans available online, which is quite convenient and time-saving. Another benefit of purchasing critical Illness insurance plans online is that they can be procured without undergoing medical tests for people under 45 years of age.