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Critical Illness Policy: What is It and Do You Need It?

Created on 23 Oct 2023

Wraps up in 6 Min

Read by 2.1k people

Updated on 25 Oct 2023

Ek se bhale do, do se bhale chaar, manjil apni dur, rasta karna paar.” You know, when it comes to our health, having regular health insurance is pretty good for basic stuff, like doctor visits and regular hospital trips. But let's face it, life can throw some real curveballs at us. Things like cancer or a heart attack are not just a big health challenge but also a financial hit. That's where Critical Illness Insurance steps in. Think of it as your financial lifeline when facing big health problems, kind of like your emergency stash of extra cash when things get tough.

It's there to give you a lump sum of money if you end up dealing with one of those serious illnesses listed in your policy.

Now, what can you do with that money? Well, it's your call. You can use it to tackle those hefty medical bills, keep up with your mortgage, or, heck, even take a well-deserved break to heal both physically and mentally. Your health, your finances, your choice! ❤️‍🩹

The idea here is to take off some of that financial weight during a major health crisis so you can focus on getting better and not lose sleep over the money stuff.

Just a little reminder, though; critical illness insurance isn't here to replace your regular health insurance. It's more like that extra protection for those unexpected heavy punches life might throw your way. So, you should be equally aware about Types of Health Insurance in India.

Moving on to…

What does a Critical Illness Policy Cover?

Different companies have their own takes on what counts as a "critical illness." It's like a different menu at every restaurant. So, the smart move is to dive into those policy documents. They might look like a maze of jargon, but trust me, it's worth it. It's where you'll find the fine print that defines what your policy actually covers.

One cool thing about critical illness insurance is that the payout happens regardless of whether you get treatment or not.

Now, there's a little twist in the plot depending on the insurance company. Some add an extra layer of protection by giving you more than your basic sum assured if you get hit with a critical illness. Sone pe suhaga! Right? 🤝

On the flip side, there are some companies that subtract what they pay out for your critical illness from your total sum assured. So, your coverage decreases after a payout. More like khoda pahad, nikali chuhiya!

Allow me to guide you through…

Which are the Critical Illnesses?

Insurance companies have their own lists when it comes to critical illnesses, and they've evolved over time. Back in 1983, policies covered just four major conditions:

  • Heart attack
  • Cancer
  • Stroke
  • Coronary Artery Bypass Surgery

But now there are several other conditions that might be covered, which includes the following diseases:

We all know, things change over time, especially when it comes to health. Some illnesses that were considered supercritical a decade ago might not be so scary today, thanks to better diagnosis and treatment. On the other hand, new challenges popped up too.

So, what gets covered really depends on what people need, what insurance companies offer, and how much folks value those benefits. Looking ahead, you could see everyday health issues like diabetes and rheumatoid arthritis becoming part of the standard coverage. It's insurance that's growing with us, adapting to our changing health landscape.

Before we understand other things related to this policy, let’s look at…

What is the difference between health insurance and critical illness insurance?

Next up…

Are your loved once covered? Read this article to know Top Health Insurance Plans for your Family.

What are the Benefits of Critical Illness Insurance?

Some key benefits of critical illness insurance policy are:

1. Financial Safety: It ensures you won't have to drain your savings or get buried under medical bills if a serious illness strikes.

2. Peace of Mind: Coping with a severe illness is challenging enough without the added stress of worrying about money. critical illness insurance offers peace of mind by guaranteeing that your finances are taken care of while you focus on recovery.

3. Family Support: It's not just about you; it's about your family too. This insurance gives you a lump sum payment that helps your loved ones maintain their lifestyle and cover daily expenses, even if you can't work.

4. Access to Quality Care: We all know very well how expensive a hospital visit can get, and with critical illness insurance, you can afford top-notch medical care, which could boost your chances of a successful recovery.

Badhti hui mehengayi dekh kar, mujhe “Aadhar Card” nahi, “Udhaar Card” ki jarurat lag rahi he. 🙃

5. No Waiting for Pre-existing Conditions: Unlike some other health insurance policies, there's usually no waiting period for pre-existing conditions with critical illness insurance. That means more people can access it, no matter their health history.

6. Financial Planning Continuity: You can keep working towards things like buying a home or saving for your kids' education, even if a major health setback comes your way.

What are the Drawbacks of Critical Illness Cover?

Critical illness insurance is great, but there are some situations it won't help with. Here's the lowdown:

1. Pre-existing Conditions: If you had a health issue before you got the insurance, and it's related to the critical illness you're claiming for, you're not covered.

2. Waiting Period: Sometimes, you've got to wait for a bit after getting the policy before you can claim for certain illnesses. If you get sick during this waiting period, the insurance won't pitch in.

3. Honesty Matters: When you sign up, honesty is key. If you hide info or lie about your health history, your claim could get denied.

4. Risky Business: If you're into extreme sports or anything really risky and you get sick because of it, the insurance might not cover it.

5. Experimental Treatments: Trying out experimental treatments that aren't widely accepted in the medical world? Your insurance probably won't chip in.

6. Alcohol or Drug Troubles: If your illness is linked to alcohol or drug issues, the insurance may not be on your side.

And now, we arrive at the final part of this article.

Why Should you Buy Critical Illness Insurance?

Here is the list of people for whom critical illness insurance is highly recommended.

1. Breadwinners: You know, the ones putting food on the table. If you're the main earner in your family, getting sick could hit your wallet hard. This insurance can be your safety net.

2. Family History of Serious Illnesses: If your family tree has some critical illness branches, you might be at a higher risk. This insurance can be your shield.

3. Self-employed Individuals: If you're your own boss or a freelancer, you don't always have the perks that employees do. Critical illness insurance is your backup plan.

4. Anyone without substantial savings: If your savings account is more "slim pickings" than a "rainy day fund," a critical illness can be financially crushing. This insurance can be your lifeline.

5. High-Stress Job Holders: Stress at work? It can mess with your health. If you've got a pressure-cooker job, having this insurance is like having a financial first-aid kit. It's there when you need it most.

And now, if you think,

 

Even if you don’t fall under any of the above criteria, still take Insurance. Kyuki jaan hai toh jahan hai!

What is the age limit for Critical Illness Insurance?

To buy a critical illness insurance plan, you must meet the following eligibility criteria:

1. The minimum entry age is 18 years, and the maximum entry age is 65 years.
2. The policy term can range from 5 years to 40 years.

The Bottom Line

While health insurance is undoubtedly crucial as it covers your hospitalisation expenses, it's important to recognise that there are other costs beyond medical charges. So, just like you wouldn't leave home without an umbrella during the monsoon season in Mumbai or a warm jacket in chilly Delhi, having critical Illness Insurance is just another essential layer of protection for your well-being.

Meanwhile, know the 6 Best Term Insurance Policies for 2023.

Stay smart, stay covered! Kyuki “antt bhala toh sab bhala.”

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Sakshi Dhakre

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Sakshi is an adventurous spirit who enjoys both the intellectual stimulation of Finance and the sensory experiences of good food and nature’s beauty. She has a passion for delving into complex financial topics and distilling them down into easy-to-understand insights. When she's not poring over financial reports, you might find her exploring a new corner of the city, trying out new restaurants and cuisines or admiring the beauty of the night sky.

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