Critical Illness Insurance Plans: Do You Need It?

Health Insurance

Critical illness insurance plans are curated health insurance policies that offer financial coverage against the expenses resulting from diseases such as – cancer, kidney failure, coronary artery surgery, etc. 

Such diseases tend to cause an immense emotional and financial toll on the afflicted and his/her family. Critical illness insurance policies cover high medical expenses incurred by offering a lump sum amount mentioned under a plan.

Types of Critical Diseases covered under Critical Insurance Plan

Critical illnesses encompass life-threatening diseases that involve prolonged treatment. Mentioned below is a list of some critical diseases covered under critical illness insurance policies:

• Cancer (of any severity)
• Heart attack or myocardial infarction
• Persistent vegetative state
• End-stage lung failure
• Motor neuron disease
• Aorta surgery
• Loss of limb
• Coma
• Stroke leading to permanent disability
• Kidney failure
• Brain surgery
• Deafness and many more

Overall, such plans usually cover over 40 such critical ailments. It is prudent to check the list of ailments covered under a policy before purchasing it.

Also Read: Key Things to Know Before Purchasing Senior Citizen Health Insurance Policies

Coverage under a Critical Disease Insurance Plan

A critical illness insurance policy helps you avail financial coverage against medical expenses incurred to treat critical illnesses. 

Treatment procedures such as heart surgery and Chemotherapy may cost around Rs. 5 lakh – Rs. 20 lakh. Hence, the sum insured under this policy is generally higher due to the exorbitant medical expenses incurred in such treatments. 

You can purchase a critical illness insurance plan as an add-on over your existing health insurance plan. The add-on cover may come with a lump-sum amount from Rs. 1 lakh to Rs. 10 lakhs based on the number of members covered under a policy. 

The annual premium amount will also vary accordingly according to these parameters.

Also Read: What to keep in mind when buying a health insurance policy

Advantages of a Policy offering Critical Illness Benefits

Critical illness insurance plans make for the most comprehensive financial safeguard against any medical expense resulting from serious ailments. These plans offer critical illness benefits with extensive coverage to the insured, where almost the entire expense may get compensated. 

There are a few other advantages as mentioned below:

Tax benefits

You can avail of tax benefits as mentioned under Section 80(D) of the Income Tax Act. You can avail of tax deductions of up to Rs. 25,000 on the premium paid with this insurance plan. Senior citizens can avail up to Rs. 50,000 as tax benefits.

Income replacement

You can use a part of the lump-sum amount as a part of income replacement to meet the medical and household expenses.

Variety of premium, policy tenure, and sum assured options

You can avail a variety of options concerning premium, policy tenure, and sum assured.

Hassle-free claim settlements

Claim settlements are hassle-free after submitting all valid documents. In this regard, Navi health insurance offers claim settlements in mere 20 minutes. Download the Navi app today to secure such benefits and more!

30 days pre-hospitalisation cover

You will get up to 30 days cover concerning any pre-hospitalization expenses before getting admitted to a hospital.

How to Choose a Critical Illness Policy?

It is important to know how to choose an insurance policy to avail of the critical illness benefits. Mentioned below are a few tips to choose from:

Premium amount

The foremost thing to check in any insurance policy is the premium amount you need to pay in a year. You must compare the premium amount with the benefits and coverage provided under the policy.

For example – You may have to pay Rs. 1198 as a premium to a certain insurer against a maximum sum insured amount of Rs. 2 crores. With another insurer, you may have to pay a little less to get similar coverage. 

Waiting period

It is a period after which the benefits are available. Now, this time varies with various insurance providers. The general waiting period is between 30 – 90 days. Again, check the policy first before purchasing.

Diseases covered

Not all insurance providers will offer coverage for the same diseases. So, check the policy documents first before purchasing one.

Renewability

Certain insurance providers put a cap on the maximum age to renew the policy, say till 50 years. Once you cross that age, you will not be able to renew the plan.

Inclusions and exclusions

Every policy has inclusions and exclusions. You must thoroughly study the policy documents to identify them before purchasing a plan.

Claim settlement ratio

Make sure to check the claim settlement ratio of the service provider. Look for a high claim settlement ratio to ensure that the insurance provider is credible. 

Critical illness Insurance Exclusions

A critical illness insurance policy comes with few exclusions, as mentioned below:

• There is no coverage during the waiting period
• Any illness diagnosed within the waiting period
• Any overseas treatments depending on the provider
• Treatments such as birth control, sex change, hernia, cataract, dental treatment, gastric, etc.  
• Any illness caused due to terrorism, war, military operations, etc.
• Any illness developed due to smoking, drinking, or drug consumption.
• Cosmetic surgery

Critical Illness Insurance Claim Process  

The claim process for critical insurance is similar to that of standard health insurance policies. There are two ways to claim your expenses; one is the cashless method, and the other is for reimbursement claims. 

Cashless claim 

This is applicable only if you undertake treatment in a network hospital of the service provider.

• First, inform the insurer or insurance company about hospitalisation.
• After that, submit the health card and photo identity proof to the hospital insurance desk.
• Fill out the pre-authorisation form and submit the same to the hospital. The hospital will then share the same with the insurance provider.
• Finally, you can avail of the claim after the insurer’s approval.

Reimbursement claim process

This is applicable if the treatment happens in a non-network hospital:

• First, inform the service provider.
• Next, fill up the form along with the discharge certificates and other necessary documents.
• After verifying all the documents and details, the claim amount will get credited to the registered bank account.

Final Word

A critical illness insurance plan makes for an important upgrade when it comes to health insurance policies. Since the treatment of these illnesses can put a sizeable dent in a patient’s pocket, having this add-on in place can help to put a much-needed financial safeguard in place.

Frequently Asked Questions

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.