Guide to Buy Critical Illness Health Insurance

​You could be a disciplined person who does all it takes to follow a fixed routine and take care of your health. But critical illnesses such as heart attack, stroke and paralysis do not come with prior notice. They strike anybody, at any time. Today's fast-paced lifestyle is one of the major causes of such medical conditions and it is better to be prepared for medical emergencies at all times. The increasing healthcare cost is another cause of concern and can lead to unnecessary stress during hospitalisation and subsequent treatments. The best way to deal with such a situation is by getting a health insurance cover for yourself and your loved ones.

A critical illness health insurance may cover more than 35 critical illnesses including cancer, blindness and heart attack. This cover pays a lump sum amount in case the insured individual gets diagnosed with a severe ailment or requires a heart bypass surgery or organ transplant. Such policies are offered as add-on covers besides standard health insurance at a small premium increase. The payout of this policy can be used for treatment and to make up for the gap in income in case the affected person is unable to work temporarily due to illness.

What factors should you consider while purchasing a critical illness policy?

Several insurance providers offer critical insurance (CI) plans. It depends on you to choose the best plan that would see you through during a crisis. Since most insurers have an online presence, you can go through their plans from the comfort of your home. The factors that you should consider are:

• The number of illnesses covered

All insurers may not cover the same number of illnesses under their plans. You must compare and select a plan that suits your needs. This would depend on some pre-existing illness that you have or some diseases that your parents may suffer from or the diseases that you are likely to get due to your lifestyle or the nature of work.

You could be a smoker, making you more vulnerable to certain diseases as compared to a non-smoker. So, you may want to check that while choosing a CI policy. ​​

• The sum-insured or the coverage amount
  

This is very important as you have to take into consideration things such as everyday expenses, EMIs or loan amounts if you have any, the tentative cost of treatment, the monthly income loss and the premium that you have to pay for a certain period.

The situation may be such that a critical illness may reduce your ability to work in the future. You should make financial provisions and choose an adequate amount of sum insured so that your family does not have to face the consequences due to lack of income.​

• The claims process​
  

You should know the claim filing system so that the process can be completed at the earliest. Keep a note of the documents that would be required, the network hospitals under the insurance company and check the claim settlement record of the company.

• Renewal benefits
  

The CI covers have to be renewed annually and there is the benefit of no claim bonus. While selecting plans, check the discounts and benefits and choose a plan as per your requirement.

• Nature of the policy
  

Check if the CI is a standalone policy or an add-on cover. Several things such as the claims process and premium amount would be dependent on the nature of the policy. This policy should not be an alternative to the standard health policy or family floater, which are more comprehensive plans.

CI is limited in scope as it covers only specific illnesses and would not be suitable for all the family members. Read through all the terms and conditions and the exclusions of the cover before buying a critical illness policy.

• Waiting period
  

A CI policy consists of certain criteria that have to be fulfilled before the payout is made. The conditions include:

• Initial waiting period

Generally, there is an initial waiting period of 90 days from the date of issue of the policy. You can file a claim only if you are diagnosed with a disease after this period is over.

• Survival time

For getting the claim amount, you have to be alive for a minimum period of 28 days after the illness has been diagnosed. In case of the unfortunate event of death after the survival period, an immediate family member or relative can claim on behalf of the insured individual. The insurer must be informed at the earliest and the intimation may be in writing or in whichever way the insurance company prefers. The associated documents should include proof of the cause of death. After the claim is accepted, the payout would be made to the nominee or legal heir of the insured.

• The waiting period between claims

In the case of multiple claims, there would be a minimum amount of time between the claims till the full payout is disbursed.​

• Tax benefits

CI policy has tax benefits similar to other insurance policies. The premium amount is tax-deductible. When you receive the payout in case of the diagnosis of a critical illness, the amount would be exempt from taxation.​

There is an option called the free look period that you get after purchasing a policy. During this period if you feel that you are not able to comply with or disagree with the terms and conditions of the policy, you can return it after stating the reasons for your objection. You may get a refund of the paid premium and a nominal charge would be deducted as expenses borne by the insurer.

In case you want to continue with the policy, take care to renew on time otherwise the policy will expire.

If you work in an organisation, your employer may provide you with the benefits of a group critical illness cover besides a group mediclaim policy or both. You have to understand the differences between these covers.

The group mediclaim will cover you and other employees for your hospitalisation expenses and that would be as per the amount mentioned in the hospital invoices. The group critical illness cover would help the employees to prepare themselves financially for any unexpected event post-diagnosis of a critical illness. The lump-sum amount received in the process would help in covering further expenses like doctor's consultation fees, cost of medicines, children's education, mortgage payments if any and other out-of-pocket expenses.

You should consider the critical illness policy as an additional layer of cover besides your regular health plan. The existing health plan would take care of the expenses for hospitalisation and treatment of yourself and your family, whereas the critical illness cover would help to overcome the financial crisis in the time of need. You would not have to dig into your savings and can utilise the sum insured received for maintaining your regular expenses without any stress.​