Critical illness (Critical Illness Cover) refers to a life-threatening disease. Certain conditions and ailments are fatal to your health. In addition, you might end up spending enormous costs in the form of medical expenses due to the chronic stages of the disease. Being diagnosed with a critical illness will cause a lot of stress mentally, physically, emotionally, and financially to you and your family.
As a policyholder, it is crucial to be aware of the conditions that are covered in your health insurance policy. This is where a critical illness insurance cover will come to your aid. You can buy a critical illness insurance plan as a stand-alone new policy or add-on to your existing base health plan.
How Does Critical Illness Insurance Work?
By default, critical illness is not covered under your standard healthcare scheme. The primary medical cover offered by your health insurer is a type of indemnity-based insurance. This means that the policy is designed to provide monetary cover for the cost of medical treatment in case of hospitalization. In short, your health insurance provider will take care of your medical bills and hospital expenses.
On the other hand, a CII is a fixed benefit plan. In the near future, if you are diagnosed with a severe condition, you will receive a one-time fixed benefit in the form of a lump sum payment. You can utilise the funds to take care of your family obligations or pay off debt/collateral, and much more. A critical illness may/may not leave you impaired or disabled for a part of your life. Therefore, it is advisable to buy CII for complete financial security if you are prone to specific health conditions.
Benefits of Critical Illness Insurance
| Type | Feature |
| What is covered? | Every CII policy comes with a pre-defined list of diseases that are covered. The list varies from one health insurance company to another and their individual plans. |
| Fixed benefit | As a policyholder, you will get a lump sum if you are diagnosed with any critical diseases mentioned in your cover. |
| Income benefit | The financial compensation can be utilized to pay off existing debt or as a form of regular income. |
| Waiting period | Yes, a waiting period is applicable under a CII plan. |
| Tax saving | The lump-sum payout is free from income tax. The premium paid towards critical insurance is also eligible for tax deduction under Section 80D of the Income Tax Act, 1961. |
| Quick processing | You need not be hospitalized in order to avail the benefits of your CII cover. A confirmed diagnosis is sufficient enough to claim for the payout. |
| Live stress-free | A CII policy will reduce the financial stress during and after the time of medical treatment. |
| Quality treatment | You can utilise the funds received from the payout to avail quality medical treatment at the best hospitals in India. |
| Why buy? | Do you have a family history of critical health conditions? If yes, it is advisable to purchase a CII policy for the long run. |
| Number of diseases | This is a standard list of critical diseases. Many insurance groups provide cover for 20 plus critical conditions under a single plan. Heart attack Stroke Cancer Renal failure Multiple sclerosis Organ transplant Paralysis Graft surgery Primary pulmonary arterial hypertension Heart valve replacement Brain tumor Comatose condition Bone marrow transplant Loss of sense organs – speech, vision, deafness Alzheimer’s and Parkinson’s disease |
Things to Consider Before Buying Critical Insurance Cover
A critical illness plan is as important as its name itself. To help you understand better, here are 5 points to check before buying CII.
| Sum insured amount | Modern healthcare is expensive, and so is the treatment for critical illness. Ensure that you check the right plan with substantial payout options. |
| Waiting period | Like all health plans, CII comes with a waiting period of 30-45 days from the date of policy inception. |
| Survival period | 30 to 90 days. |
| Renewability option | Yes, many insurers offer lifetime renewability options under critical illness cover. |
| List of conditions | Always purchase a plan that covers a maximum number of critical illnesses. |
A critical insurance coverage scheme is a robust safety net for you and your family. Given the increasing trend of medical inflation, it is a viable option to buy CII in addition to your healthcare cover. At Plum, we like to make insurance as simple as possible.
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