By the time you are done reading this, 4 people under the age of 50 will die of a heart attack.
In the race to have a successful career and staying ahead of counterparts, our health has taken a toll. Furthermore, our unhealthy lifestyle, combined with smoking, obesity, stress, unhealthy eating habits, lack of exercise, etc. has worsened the situation. Due to the sedentary lifestyle, the even younger generation is suffering from life-threatening illnesses. According to estimates, 40% of heart patients in India are of the age group between 25-35 years.
The cases of critical ailments like cancer, lung diseases, and other chronic ailments are increasing which are not only costly to treat but also lead to a financial loss in case the breadwinner of a family is diagnosed.
What is a critical illness insurance policy?
Unlike a standard health insurance policy that covers hospitalization expenses, a Critical Illness Insurance Policy pays a fixed amount if you are diagnosed with any of the critical ailments, as mentioned in the policy document. The lump-sum amount can be used to meet household and other expenditure on diagnostic tests and treatment. The policy is over once the lump sum payment is made.
What is covered under the policy?
Common ailments covered under the policy vary from policy to policy. But, here are some of the major illnesses which are covered under all policies are:
- Heart Attack (Myocardial Infarction)
- Stroke
- Kidney failure
- Cancer
- Major organ transplantation
- Major organ transplantation
- Paralysis
- Primary Pulmonary Arterial Hypertension
- Benign Brain Tumour
- Alzheimer's disease
- End-Stage Liver Illness
Standard health insurance policy vs. critical illness policy
Standard Health Insurance Policy
It covers illnesses or injury as long as it is described in the policy document. The policy covers only those medical expenses that are incurred in India. The payout is made based on medical costs incurred. The health insurance policy continues to offer coverage even after the claim is paid, till the policy is renewed.
Critical Illness Policy
It covers critical illnesses only, as listed in the policy document. The critical illness plan pays a lump sum amount on detection of a critical illness, regardless of the fact that whether the treatment is taken in the country or not. A lump sum amount benefit is paid on diagnosis of an acute ailment, regardless of the medical expenses. The critical illness policy ends once the benefit is paid to the beneficiary.
Benefits of a Critical Illness Policy
- Acts as an income replacement: Critical illnesses not only affect the person physically; it also has a significant impact on the finances of the family. Critical illness insurance pays a lump sum which can be used to pay medical and household expenditure.
- Tax benefits: Critical illness payout is exempted from tax under Section 80D of the Income Tax Act.
- Covers treatment taking place overseas: Under a critical illness insurance plan, a fixed sum is paid on the diagnosis of an acute illness, regardless of whether the treatment takes place in India or overseas. It means the critical illness policy can help you if you want to go overseas for advanced medical treatment.
How does critical illness insurance work?
If you are detected with any of the mentioned critical illness, the insurance company will pay the sum insured as a lump sum. Apart from paying hospitalization charges, the amount can be used to pay loans, household expenditure, school fees, etc.
Even if you want to go overseas for further medical treatment, you can do so with the help of this insurance amount. This amount is an income replacement and hence, can be used in a way you want.
Our reckless lifestyle the cause of most of the life-threatening ailments. But, it does not mean you should not buy the individual health insurance policy. First, you should buy a health insurance policy and then, include the critical illness plan as a second layer of protection in your insurance portfolio.