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.
Health insurance calculator
A health insurance premium calculator is used to estimate the premium that one would be charged while buying an insurance policy. Using a health insurance premium calculator is no rocket science, you will just have to enter your personal details and the type of policy chosen, and the page will showcase the amount that is to be paid. Not only this, insurance premium calculators even tell you the features your health insurance plan offers and the benefits it provides. Therefore, an insurance premium calculator is a very useful tool that will help you in selecting the best policy for yourself.
Critical illness insurance cover
As the name suggests, critical illness insurance cover is an insurance policy that offers coverage against life-threatening diseases. These diseases include cancer, AIDS, heart attack, kidney failures, tumors, etc. There is a separate insurance policy designed for critical illnesses because they require a lot more care, checkups, hospitalization, and medications than the normal ones. The treatments of these diseases are expensive and thus having coverage for them is required.
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
Advantages of Critical Illness Insurance
Apart from the necessity a critical illness insurance policy holds there are a lot more benefits that you can avail:
- Lump Sum Payout
Most critical illness plans provide a lump sum amount that can be used in the treatments of critical illnesses. Also, when a person suffers from a terminal illness, the payout of the policy can act as an income replacement.
- Tax Benefits
You can avail of tax benefits as per section 80D of the Income Tax Act, Critical illness insurance payouts are tax-free
Covers Treatment taken Abroad
Another huge benefit of a critical illness inYou can get treated abroad and still avail of the coverage
Why are critical illness insurance plans necessary?
There are many reasons which necessitate a critical illness insurance policy. These reasons include the following –
- 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.
- 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.
- 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.
- 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.
- Supplementing health insurance
Critical illness plans can be used to supplement an existing health insurance plan in the event of facing any critical illness.
Tax benefits under a critical illness insurance policy
Critical illness insurance policies are more of a necessity than anything. These critical diseases not only drain the person and his family financially but also emotionally and this is the reason why the government of India offers tax benefits on critical illness policies.
Under the Income Tax Act of India, 1961, Section 80D the policyholders can avail tax discounts of up to INR 25,000 on critical illness policy. On the other hand, senior citizens can avail of tax benefits up to INR 50,000 on the same.
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 –
- 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
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 select an ideal critical illness insurance plan?
It is very important to buy the right critical illness insurance plan for your loved ones so that it can pay off when the time comes. While experts suggest comparing plans thoroughly before purchasing as an important step in selecting the best plan, there are other pointers that you should also take care of.
- Go for a stand-alone policy rather than choosing an add-on
You can add critical illness cover to your existing health insurance plan just by choosing the add-on. However, this may not be as effective as a full-fledged critical illness insurance plan. Therefore, one should try going for a stand-alone policy though it might be costlier.
- Look at the coverage you are provided
The main role of critical illness insurance policies is to offer coverage against fatal diseases. You need to check the diseases that are covered in your plan. Some plans offer coverage for 20 or more diseases while some offer coverage only for the basic critical diseases.
Tip: Consider your family history, lifestyle, smoking habits, etc to estimate which policy would be the best for you.
- Consider the waiting period before purchasing
Waiting period is the time period during which no claim requests are settled. You should go for a policy that has a shorter waiting period so that it can help you in a medical emergency.
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:
- 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.
- 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.
- 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 –
|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
|Care Critical Illness Health Insurance||• 32 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 15 illnesses under the Basic plan variant and 30 illnesses under the enhanced plan variant.|
• Sum insured under both the variants is INR 1 lakh to 25 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||• The plan comes in two variants, the basic variant and the Platinum variant.|
• Where the first variant covers 8 critical illnesses the second one covers for 16.
• Sum insured up to Rs.10 lakhs
• Lifelong renewability
• Tax benefits are offered on the premiums paid.
|Reliance Critical Illness Policy||• Coverage of 10 major illnesses|
• Sum insured up to Rs.10 lakhs
• Easy claim settlement
• No medical tests are required
• Tax benefits are offered.
|Future Criticare Plan||• Coverage of 12 illnesses|
• Sum insured up to Rs.50 lakhs
• Floater coverage is available
How to file a claim for a critical illness policy?
Following are the steps to file a critical illness policy claim:
- Visit your insurer’s official website to file your claim. You can even call the company to file your claim request.
- Answer some questions related to your claim and submit your documents including a duly filled claim form, photocopy of your ID card and medical certificate of the diagnosed critical illness.
- Submit the claim and wait for it to be verified. The company will inform you about whatever may be the decision.
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 –
- First heart attack of specified severity
- Paralysis of both limbs
- Multiple Sclerosis
- Major organ transplant
- 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 do you need a critical illness policy?
With the rise in changing lifestyle, bad eating habits, irregular sleep routines, pollution and other factors today diseases are increasing at an unstoppable rate. Critical diseases can be life-ending and can lead to financial crisis, depression and whatnot. A critical illness insurance policy is necessary because it stands as financial support when and where needed.
Who can benefit from a critical illness policy?
Anybody who wants to safeguard their families in the future and keep them away from any kind of problems should consider buying a critical illness policy. Whether you are the primary earner of your family or are worried about the lifestyle of your loved ones, this insurance policy can benefit you.
Moreover, when such a fatal disease hits a person he loses his efficiency to work and earn. A critical illness insurance policy provides a lump sum amount that can be used to finance treatments, medication, and household expenses.
Who should buy a critical illness insurance policy’?
The 21st century’s sedentary lifestyle has brought a lot of illnesses with themselves that is spreading at a much faster rate than expected. Unlike before when generally the older people would get affected, today the younger ones are not spared either. Chronic heart diseases, renal failures, tumours, cancers, organ transplants, AIDS, etc have become more common than ever. The diagnosis, treatment, medication, and post-care treatments of these fatal diseases are so expensive that they can drain the savings of the family and can cause a citation of the financial crisis. To avoid any of such horrific scenarios buying a critical illness insurance policy is important.
While this is a type of insurance that every individual should undoubtedly have, the following are the people for whom it is of utmost importance:
- One who has already been diagnosed with a critical illness
- Those who have a family history of any specific disease
- Those who have entered or are about to enter their 40s
- One who is the single earner of the family
- Those who are prone to diseases
Factors to keep in mind while opting for a critical insurance policy
We know how important it is to choose the right critical illness insurance policy in order to be able to bear the financial burden. Here are some factors that play an important role in doing so:
- Analyse your coverage requirements and estimate the sum assured that would work for you.
- Try buying a critical insurance policy at a younger age as the premium of these policies are higher for senior citizens.
- Carefully analyse the plan you are choosing and read the inclusions and exclusions of the plan to avoid future disputes.
- Check the sub-limits of the policy.
- Make sure you research well enough about the company that you are planning to buy the policy from.
- Going through the ratings and reviews of other customers will also help you in making a well-informed decision.
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.
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.