As part of smart financial planning, you may avail a term life insurance plan to financially safeguard your family or pay off debts in case of an untimely demise. However, you may not have planned for medical emergencies like a critical illness which can blow your savings away.
Advances in Medicare and healthcare have increased life expectancy, which means more people are surviving illnesses that caused fatalities in previous generations. However, the treatment of critical illness comes at a high expense and changes your financial status.
Critical illness insurance plans in India are insurance plans that are designed specifically for these situations.
Critical illness insurance plans offer financial support when medical and long-term care costs a lot and can blow away savings.
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Critical health insurance plans are long-term plans which cover specific critical illnesses as mentioned in the policy terms and conditions. If you are affected by a critical illness, then the policy would pay out a lump sum which can be used for the following:
The most important underlying criteria for making a claim is that the insured must survive for a minimum of 30 days from the date of diagnosis of the critical illness. These 30 days are in addition to the initial waiting period of 60-90 days which most insurers follow.
SEE ALSO: Critical Illness Health insurance
Few of the illnesses covered under critical illness plans are multiple sclerosis, heart attack, cancer, stroke, transplantation of major organs, kidney failure and so on. With increasing competition, insurers are covering more illnesses like major burns, loss of speech, loss of eyesight, deafness, and so on. Typically, the policy outlines the illnesses that are covered, and this varies across insurers. HDFC Ergo covers 8 illnesses while Max Bupa, Bharti AXA and Religare cover 20 illnesses. ICICI Lombard and Tata AIG policies have 9 and 11 illnesses covered respectively.
The major exclusions across most insurers in India vis-à-vis critical insurance plans are as mentioned below:
The major factors that define the need of a critical health insurance policy are as mentioned below:
The premiums paid towards critical illness insurance plans qualify for tax deduction of up to Rs 25,000 a year under Section 80D of the Income Tax Act.
After evaluating the requirements, you must compare various insurers and pick that insurer which offers coverage for those diseases which could affect you. Important factors to be accounted here are illnesses covered, sum assured, procedure for claiming on the insurance policy and the rate of claim approval by the insurer (claim settlement ratio).
A general health insurance plan (mediclaim policy) covers you up to a certain extent. However, it is not sufficient for covering living expenses and lifestyle habits, when you are affected by a critical illness. Hence, it is important to avail a critical illness cover as a top-up on self or employer offered health policies.
For example, if you are in the age group of 25-30 years, with a Rs 5 Lakh medical insurance, then you can add a critical illness cover of Rs 10 to 15 Lakhs to cover self and family against financial difficulties.
To choose the best critical illness insurance plan, you must consider the below mentioned parameters:
The premium of a health insurance policy rises with increase in age as people are more prone to critical illnesses and diseases as they grow old. Keeping this in mind, it is wise to avail a health insurance policy at a younger age.
SEE ALSO: Family Health Insurance Plan
To claim on critical health insurance policy, you must get in touch with the insurer. Below mentioned documents are generally asked by most insurers:
Following are the advantages of critical health insurance:
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