Reasons to Know Critical Illness Insurance Policy for Health - Financing Panda: Latest News on Finance, Loan, Business


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Monday, October 29, 2018

Reasons to Know Critical Illness Insurance Policy for Health

The human body is a storehouse of unbound mysteries, thus making our existence an extremely vulnerable one. In order to combat the resultant existential risk, health insurance plans play an important part by absorbing the financial risk arising on detection and treatment of medical complexities. However, certain illnesses pose a much greater threat to human life. These are termed as critical illness, they include the likes of cancer, AIDS, kidney failure, paralysis, neurological disorder, etc. Basic health insurance plans often fail to cover critical illness expenses, thus, adding a critical illness insurance rider becomes an absolute necessity.

However, in order to understand the importance of a critical illness policy, a comparison of no-frill health insurance plan and critical illness policy is necessary.

In India, regular health insurance plans, merely covers pre- and post-hospitalization costs along with that of the treatment, either by cashless treatment or by reimbursement of the expenses incurred. But critical illness insurance policy covers the policyholder’s expenses right from the diagnosis of the disease with a one-time lump-sum payment option, thereby meeting medical expenses as well as any financial liability the insured’s family is subjected to.

As per the insurance parlance, critical illness insurance covers only a handful of diseases. But the maladies covered demand the most expensive treatments. On the other hand, regular health insurance plans cover a cross section of diseases, but most do not require complex treatments. One of the most useful features of a critical illness insurance is that, as opposed to regular health insurance plans renewable on a yearly basis, a critical insurance policy is valid for a period of 15 to 20 years.

Given the differences in regular health insurance plans and critical illness insurance policy, it is advisable for an individual to combine the benefits of both - a health insurance with critical illness cover. A health insurance plan empowered with a critical illness rider enables you to enjoy optimum cover with a single premium. A cost analysis of the same will prove that by doing so the yearly premium of a policyholder will increase only nominally, while the sum assured will considerably increase. To know more about how a critical illness cover compliments your health insurance visit the Bajaj Finserv Critical Illness Plan page!

Certain benefits of critical illness insurance are as follows -
  • Income replacement
Insurers offering critical illness riders offer lump sum payout options, enabling the insured to meet his/her medical expenses as well as ensure a source of secondary income for the family. This ensures the lifestyle cost of the family is met.
  • Tax exemption
Critical illness cover being a form of health insurance enables the insured to claim tax benefits on the premium paid under Section 80D of the Indian Income Tax Act of 1961.
  • Aggregate Insured 
Medical Insurance designs permit getting higher aggregate when compared with critical illness plans. On the off chance that you apply for a wellbeing plan, you can get total protected up to Rs.5-6 crores. But, in case of critical illness plans, the whole guaranteed claim amount is for the most part between Rs.10 lakhs and Rs.25 lakhs.
  • Larger cover
The patient and his family can concentrate more on the patient’s recovery with an additional cover of up to Rs.50 lakh under the critical illness plan, over and above the sum insured offered by the health insurance plan.
  • Increased customization
This form of health insurance rider offers added flexibility to the insured by covering expenses not usually covered by health insurance policies. Critical illness riders also cover expert medical advice, and cost of medicines as a part of the treatment process.
Hence, it is a must to include a critical illness rider in your health insurance plan, or purchase a standalone critical illness policy.  

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