Critical illnesses are illnesses which might prove fatal and require intensive treatments. Such treatments are quite expensive and pose a burden on every common man’s finances. Critical illness health plans, therefore, prove quite useful. These plans help in meeting the high costs associated with critical illnesses. As such, the plans provide financial security. Let’s understand the concept and working of a critical illness health insurance plan.

What are the critical illness health plans?

Critical illness health plans are fixed benefit health insurance plans which cover a specified list of critical illnesses. Some common illnesses covered include cancer, stroke, heart attack, major organ transplants, liver failure, lung failure, multiple sclerosis, etc. If the policyholder is diagnosed with any of the covered critical illnesses during the term of the plan, the sum insured is paid in lump sum irrespective of the actual medical costs incurred.

Features of critical illness insurance plans

Critical illness insurance plans have some common features which give these plans their distinctive nature. Some of the common features of these critical illness plans are as follows –

  • A critical illness policy covers specific illnesses as well as treatments and surgeries which you might undergo
  • These plans pay the full sum insured as soon as you are diagnosed with a critical illness that is covered by the policy
  • Every critical illness policy covers a list of critical illnesses. The critical illness list varies across policies and so you should check the policy to find out the number and types of illnesses that it covers
  • Critical illness plans allow you to opt for high sum insured levels so that you are adequately covered if you a face a severe illness or undergo an advanced treatment
  • The premiums are affordable because critical illness plans cover only the listed illnesses. If you are hospitalised for any other medical contingency, these plans would not cover your hospitalisation and pay the claim
  • A critical illness policy is usually issued on an individual sum insured basis. However, some plans also allow floater coverage
  • Critical illness insurance plans can be issued by both life insurers and health insurers. Life insurers issue a long term policy while in case of health insurers, annual plans are issued
  • If a claim for a critical illness is made, the policy would be terminated after the claim is paid
  • The claim amount received from critical illness insurance plans can be used for meeting medical expenses or for any other financial obligations
  • A critical illness policy is independent of other health insurance plans that you might have invested in. Even if you have an existing health plan covering your illness, the critical illness policy would pay a claim if you suffer from the covered illness.
  • The premium that you pay for critical illness insurance plans qualify as a deduction under Section 80D of the Income Tax Act, 1961. You can claim a deduction of up to INR 25, 000 if you are aged below 60 years or up to INR 50, 000 if you are aged 60 years and above
  • There might be a survival period ranging from 30 to 90 days within which the insured should not die after diagnosis of the critical illness so that the claim can be paid
  • Many critical illness plans allow free second opinion from the company’s empanelled experts if you suffer from a covered critical illness

Why are critical illness insurance plans necessary?

There are many reasons which necessitate a critical illness insurance policy. These reasons include the following – 

  1. Rising illnesses

    Illnesses like cancer, heart related ailments, etc. are on the rise. Nowadays, many individuals are getting afflicted with common critical illnesses and are requiring intensive treatments. A critical illness plan, therefore, proves to be relevant.

  2. Expensive treatments

    Treatments required for critical illnesses are very expensive. Individuals, thus, need a specially designed plan which pays for such expensive treatments where a normal health insurance might prove to be insufficient.

  3. Flexible usage of benefits

    Then best part about critical illness plans is that the benefit received can be used in any way. A lump sum amount of money is paid which you can use for availing advanced treatments or for any other financial liabilities which you have.

  4. Tax benefits

    The premiums which are paid for a critical illness plan are allowed as a tax deduction under Section 80D. Thus, you can avail tax benefits too from a critical illness policy.

  5. Supplementing health insurance

    Critical illness plans can be used to supplement an existing health insurance plan in the event of facing any critical illness.

Critical illness insurance v/s health insurance plans

Critical illness plans are a type of health insurance plan and yet many times they are compared to health plans. So, let’s find out the similarities and differences between critical illness and health insurance plans –

  • Similarities
    • Both these plans cover the financial loss suffered in a medical emergency
    • Both plans pay a claim if you suffer a severe illness or undergo an advanced treatment
    • Both the policies can be taken for self as well as for your family members
    • Both plans allow tax benefits on the premiums that you pay
  • Differences

    Besides the above-mentioned similarities, critical illness and health insurance plans are completely different from one another. These differences can be understood with the help of the following table –

    Critical illness insurance

    Health insurance 

    It is a type of a health insurance policy

    Health insurance is a broad concept which includes critical illness insurance as well

    The plan covers specified critical illnesses and medical treatments like cancer, stroke, bypass surgery, major organ transplants, etc.

    The plan covers the medical costs incurred when you are hospitalised due to any illness or injury except those which are excluded by the plan

    The full sum insured is paid as claim

    The actual medical costs incurred would be paid as claim subject to a maximum of the sum insured 

    You get independent claims from each policy if you have multiple critical illness plans or a combination of health insurance and critical illness plans

    If you have more than one health insurance policy, the claim can be shared under both the policies in a ratio that you choose. However, you cannot claim for the same medical expenses from both the policies

    Premiums are low

    Premiums are higher since health plans allow a wide scope of coverage 

How to buy critical illness insurance plans?

Given the important of critical illness plans, many health insurers offer a critical illness policy. However, when buying critical illness plans, you should be careful. A plan must be bought only after comparing it with other available plans. To compare, the following parameters should be used:

  1. The illnesses covered

    Look at the number of illnesses covered by the different plans. The higher the number of illnesses covered, the wider the scope and the better the plan.

  2. The sum insured levels allowed

    Critical illness plans allow coverage up to specified levels. Look for these levels. Match your coverage requirement with the allowed coverage levels and choose a plan which offers the coverage amount you require.

  3. Premium rates

    The last parameter should be the premium rate of the plan. Critical illness plans have low premium rates. When comparing, compare the premium vis-à-vis the coverage offered.

To buy a critical illness insurance policy, you have two modes –

  • Offline mode

    Under this mode you can visit the branch of the insurance company or buy the policy through an agent of the insurance company. A physical form would have to be filled and submitted to buy the critical illness policy offline.

  • Online mode

    The online mode allows you a more convenient way of buying a critical illness policy. To buy online you can visit the insurance company’s website or the website of insurance aggregators and invest in a plan. The policy is issued instantly as the whole process is simplified. Through the online mode you can also compare the critical illness cover offered by different plans and then choose the best critical illness policy which offers a comprehensive scope of coverage at competitive premium rates.

    Turtlemint is an online platform which allows you to buy the best critical illness insurance plans through its portal. You can visit https://www.turtlemint.com/health-insurance/, choose ‘Buy New policy’ and find the best critical illness policy for your needs.

Comparison of best critical illness insurance plans

Here is a list of the best critical illness insurance plans for you to find and choose the best policy –

Plan

Salient features

HDFC ERGO Optima Vital

  • 37 critical illnesses are covered
  • Sum insured allowed up to Rs.50 lakhs/li>
  • E-opinion is available on the diagnosis of critical illness
  • Value-added services of healthline and health risk assessment

Care Assure

  • 20 illnesses covered
  • Sum insured up to Rs.1 crore
  • No survival period
  • Inbuilt coverage for the personal accident too
  • Free health check-ups and medical second opinion

Star Criticare Plus Insurance Policy

  • Coverage against 9 major illnesses
  • No survival period
  • Non-allopathic treatments are also covered
  • Coverage for hospitalisation expenses even after paying the claim

Manipal Cigna Lifestyle Protection – Critical Care Insurance Plan

  • Coverage of up to 30 illnesses under the enhanced plan variant
  • Sum insured up to Rs.3 crores
  • A claim can be received in one lump sum or in staggered payments
  • Online wellness programs developed for policyholders
  • Free medical second opinion in a critical illness

Bajaj Allianz Critical Illness Plan

  • 10 major illnesses are covered
  • Sum insured up to Rs.50 lakhs
  • Claim settlement through the specially developed app

HDFC Ergo Critical Illness Policy

  • Comes in two variants covering up to 16 illnesses
  • Sum insured up to Rs.10 lakhs

Reliance Critical Illness Policy

  • Coverage of 10 major illnesses
  • Sum insured up to Rs.10 lakhs
  • Easy claim settlement

Future Criticare Plan

  • Coverage of 12 illnesses
  • Sum insured up to Rs.50 lakhs
  • Floater coverage is available

What is covered under critical illness insurance plans?

Critical illness plans cover a list of critical illnesses and treatments. Some of the common illnesses and treatments covered can be found under the following critical illness list –

  • Cancer 
  • Stroke
  • First heart attack of specified severity
  • Paralysis of both limbs
  • Multiple Sclerosis
  • Major organ transplant
  • CABG
  • Repair of heart valves
  • Coma of specified severity
  • Bone marrow transplant
  • Motor neurone disease
  • Aplastic anaemia
  • End-stage liver disease, etc.

If the insured member is diagnosed with any of the covered illness, the sum insured would be paid in a lump sum.

What is not covered under critical illness insurance?

Critical illness plans do not cover hospitalisation expenses or any other illness or treatment except those specified under the critical illness list. Moreover, the following instances of critical illness would not be covered under the plan –

  • Pre-existing critical illnesses
  • Illnesses suffered due to war or nuclear contamination
  • Illnesses suffered during the initial waiting period which ranges from 30 to 90 days
  • Illnesses due to consumption of alcohol, drugs and/or tobacco
  • HIV/AIDS and other diseases which are sexually transmitted
  • Pregnancy and related expenses
  • Cosmetic treatments
  • International treatments, etc.

Why choose Turtlemint for critical illness insurance?

A critical illness plan should be bought only after comparison. Turtlemint allows this comparison in a simple manner. You can fill in your requirements and get a list of all available critical illness plans offered by all leading insurance companies. You can then compare the available plans and choose a plan which is the best critical illness insurance plan as per your requirements. You can also get assistance for any queries which you have and claims which occur in your critical illness policy. Thus, Turtlemint gives you a complete package of buying critical illness plans.


FAQ’s

Yes, premiums paid for critical illness plans are allowed as a deduction under Section 80D. The limit is Rs.25, 000 which increases to Rs.50, 000 for senior citizens.


Yes, critical illness plans pay the claim irrespective of other health insurance claims which you might have received.


The claim received under a critical illness plan can be used for any financial purpose whether it is medical or personal in nature.


Survival period is that period which the insured should survive after being diagnosed with a critical illness to be eligible for getting a claim under the critical illness plan.


The duration of the survival period depends on the critical illness plan. It, usually, ranges from 30 days to 90 days.


If the insured does not survive the survival period, no claim is paid under the critical illness plan.