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HEALTH INSURANCE

How does critical illness insurance work?

Jagrity Sharma Jagrity Sharma 19 August 2019
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Critical illness insurance policy covers you against the risk of severe illness such as heart attack, cancer, stroke and many more. Buying critical illness insurance is the best way to get over the shortcomings of your existing health insurance policy.

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If you already have a health insurance policy, maybe it’s time to consider creating another financial cushion through a critical illness insurance policy. It is often suggested that one should buy critical illness insurance around the age of 40 years. However, buying insurance early still helps as the health risks are less, and so is the cost. Considering changing lifestyle and diseases related to work-life, some people even get heart attacks at the early age of 35. A critical illness insurance rules out facing financial problems arising out of such life-threatening situations.

How does critical illness insurance work?

A critical illness insurance policy works differently from a regular health insurance plan. Critical illness insurance is a health plan that pays a lump sum amount equal to the sum insured, to the policyholder on diagnosis of the severe disease specified by the insurer. A critical illness cover offers a lump sum benefit which can be used to pay for the treatment, and recuperation expenses. The insurance company pays the full sum insured regardless of your hospital expenses.

Critical illness insurance policy is, therefore, a defined-benefit plan as the benefit payable is defined and fixed. It does not matter if you hold more than one critical illness insurance plan as every such plan pays the benefit. A regular health insurance policy, on the other hand, is an indemnity plan which reimburses the medical expenses incurred.

One of the key features of a critical illness insurance policy is that you get payout, only if diagnosed with a critical illness that is specified by the insurance company. Moreover, the premium you pay for your critical illness insurance is based on the information that you give to the insurer when you apply for the plan. The premium amount is based on a variety of factors such as level of cover required, your age, your gender, your occupation, and whether you smoke or not.

Which critical illnesses are covered under the critical illness insurance policy?

The number of critical illnesses covered by insurance companies may vary. Most insurers cover approximately 8 to 20 major critical illnesses or even more. Some of these are a heart attack, stroke, coronary artery bypass surgery, cancer, kidney failure, aorta surgery, paralysis, heart valve replacement and major organ transplant.

Best critical illness insurance policy India

Here is a list of best critical illness plans offered by reputed insurance companies in India.

Bharti AXA Smart Health Insurance Plan (inbuilt Critical Illness Cover)

Bharti AXA Smart Health insurance policy is one of the many health plans offered by Bharti AXA. The policy covers 20 critical illnesses and pays hospitalisation expenses upon diagnosis of the illness.

Key features of the plan:

  • Pre and post-hospitalisation expenses are covered under this plan.
  • The plan covers daycare treatment
  • The policy covers the cost of treatment of the organ if the insured undergoes a major organ transplant.
  • You can avail cashless hospitalisation facility at more than 4500+ hospitals across the country.
  • The policy covers pre-existing medical conditions after four constant policy renewals.
  • The company has a hassle-free claim settlement process.
  • Premiums paid towards this policy are eligible to receive tax benefits under Section 80D of the Income Tax Act, 1961.
  • The policy also covers domiciliary treatment expenses. ###Religare care plan

Religare care plan offers an array of features and benefits as mentioned below:

  • The policy offers coverage for around 170 procedures and needs the insured to be hospitalised for a minimum of 24 hours.
  • The plan covers pre and post-hospitalisation expense up to 30 and 60 days, respectively.
  • The policy provides restore benefit that is equal to 100% of the sum insured.
  • The company offers no claim bonus of 10% of the basic sum insured up to a maximum of 50%.
  • The plan covers organ donation expenses in the range of Rs. 50,000 to Rs. 3 lakhs.
  • Premiums paid towards this policy are eligible to receive tax benefits under Section 80D of the Income Tax Act, 1961. ###HDFC ERGO Critical illness

HDFC ERGO critical illness policy is yet another popular critical illness insurance plan that offers easy access to comprehensive financial security to the insured. The policy is available in two different variants – Silver and Platinum. The plan offers coverage against 8 to 15 specified critical illnesses.

Key features of the plan:

  • A lump sum benefit is paid to the policyholder after confirmed diagnosis.
  • Discounted premiums are offered for the policy term of 2 years.
  • No pre-medical screening is required for people up to the age of 45 years.
  • The company offers 15 days grace period to make a premium payment.
  • Premiums paid towards the policy is eligible to receive tax benefits deductions under Section 80D of the Income Tax Act. 1961. ###Max Bupa Critical illness – Criticare

Criticare plan from Max Bupa offers a host of benefits a mentioned below:

  • The policy comes with two distinct variant options. Benefit option 1: Sum insured is payable in a lump sum. Benefit option 2: Sum insured is payable in a lump sum with 10% additional sum insured payable each year for 5 subsequent years.
  • The plan offers direct claim settlement without third-party intervene.
  • The policy offers lifelong renewability option.
  • Premiums paid towards the policy are eligible to receive tax benefits under Section 80D of the Income Tax Act. 1961.
  • The policy covers pre-existing medical conditions after completion of four policy years. ###Apollo Optima Vital Health Insurance

Apollo Optima Vital health Insurance offers critical illness cover with higher coverage at a low premium.

Key features of the plan:

  • The policy offers a lump sum benefit if the insured is diagnosed with any 37 critical illnesses as specified by the insurer.
  • The policy offers lifelong renewability option.
  • The plan offers a policy term of 1 and 2 years. A discount of 7.5% is given if the customer is opting 2-year policy.
  • Premiums paid towards the policy are eligible to receive tax benefits under Section 80D of the Income Tax Act, 1961.
  • The policy covers pre-existing conditions such as joint replacement, hernia, cataract, etc. after completion of 4 policy years. There is no doubt that a critical illness insurance policy can help you to cope up with severe health and financial condition. However, choosing the best plan is the key to success. With a range of critical illness insurance plans available in the market, selecting a suitable policy can be a tricky task. While choosing a critical illness insurance policy, make sure that it is in symmetry with your existing insurance policy, if any. This will help you to get adequate coverage at a reasonable cost. Together, both health and critical illness insurance should cover all aspects of health care to make your health insurance portfolio secure.
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Jagrity Sharma
Written by Jagrity Sharma
A bibliophile who hates alliterations, but loves cream, comics and content immensely! On another note, a content marketer who leverages the power of words to explain...almost anything!
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