While having a health insurance policy is great, even better will be if you have critical illness insurance coverage as well. Critical illness insurance provides financial safety if you are diagnosed with a life-threatening illness, such as various types of cancer or cardiovascular disorders.
Here are some features of critical illness insurance that you should know before choosing a plan for you:
Sum assured and financial security
Unlike a regular health insurance policy that requires you to submit hospital bills to receive coverage, critical illness insurance provides you a lump sum amount if you are diagnosed with a grave illness. The amount given is irrespective of your medical bills, so you can also use it to cover loan EMIs, household expenses, or other such expenses that may become a burden to pay due to your illness. However, note that this insurance does not cover your hospitalisation expenses, so as a general rule, have a regular health insurance plan in place too.
Critical illness insurance also acts as a safety net if the beneficiary is unable to work due to their illness. Moreover, if you are forced to take leaves on several occasions to keep up with hospital appointments, your policy can provide coverage for the loss of income caused. Some insurers also cover expenses if you receive treatment in another country. As per current tax laws, critical illness insurance policies are subject to tax benefits of up to Rs. 15,000 under Section 80D of the Income Tax Act, 1961.
Standalone policy or rider
If you have a family history of serious illnesses and/or are the breadwinner, you should get critical illness insurance. Once you have decided you want this coverage, determine whether it will be in the form of a standalone policy or a rider with your regular health insurance or term life insurance.
A standalone critical illness insurance policy provides more comprehensive coverage than a rider. Although insurance experts recommend you go for a standalone policy because of this factor, this option may not be feasible if you have financial constraints. In such a situation, choose a rider with your regular health insurance or term life insurance plan.
A rider can offer you similar benefits as that of a standalone policy. If you already have a health insurance plan with no critical illness coverage, you can get this rider added while renewing your health insurance. Remember, the coverage amount with a rider depends on your base policy, so the coverage will be lesser than that provided by a standalone policy.
Waiting period and survival period
Like general health insurance policies, critical illness insurance policies also come with a waiting period. It is the number of days the beneficiary must wait before being eligible to file claims. If you are diagnosed with a covered illness during the waiting period, it will be excluded from the purview of the policy. The waiting period is typically determined based on the severity of the illness. It usually lasts for 30 days from the start date of the policy.
Aside from the waiting period, critical illness insurance policies have another clause—survival period. It is the duration you must live after being diagnosed with the illness to be able to utilise your policy. The survival period is a crucial aspect of these policies because if you die before the end of the survival period, your family will not benefit from the policy. It is only after you make it through the survival period that the benefits of the policy can come into effect. When comparing critical illness insurance policies, look for the ones with a shorter survival period in order to avoid the possibility of the period taking a heavy emotional toll on you.
All in all, investing in a critical illness insurance policy is a good idea to secure your future. Before you finalize a policy, ensure that the above features suit your needs. Moreover, if getting this coverage as an independent policy is proving to be hefty on your finances, get it added as a rider the next time you renew your health insurance!
