We have earlier discussed about the differences between various Health Insurance plans.
Now let us discuss Critical Illness Insurance in detail.

The term critical illness often comes up when dealing with financial planning. What this article will aim to do is to explain exactly what that term means. Let me show you how best to use it and whether or not you will actually need it.

Critical illness insurance is unique in so much as it is a type of insurance that can and is added as an additional benefit but can also be taken out as a standalone contract in its own right. The aim of this type of benefit is to pay out the sum assured should the insured person suffer one of a range of critical illnesses, such as heart attack, stroke, cancer, major organ transplant and many more.

STANDALONE POLICY
A critical illness cover works just like other standalone policies like an accident policy, or a health insurance policy. The major benefit of taking a standalone critical illness cover is that most companies pay the sum assured soon after diagnosis and there is no waiting, or survival period.

Critical illness has generally been thought of as a privilege of the wealthy alongside mortgage life insurance.

The incidence of critical illnesses in India is steadily rising. According to data collated from various health reports, by 2012, cancer and heart disease will constitute 37 per cent of the expenditure on patients admitted in hospitals. At present, 30 per cent of heart attack patients are below 30 years and 18 per cent of the urban population has hypertension.

The question here is: how many of you are prepared to meet such an eventuality?
One of the strategies could be to take a critical illness cover before it gets too late.

Why would you take critical illness when you have Mediclaim?
Most of us would assure ourselves that our medical insurance would meet any health-related issues in future. But that’s not true. Unlike a health insurance, which covers your hospitalization costs, a critical illness policy, or rider, could cover your financial loss arising out the ailment.

Almost everyone takes a Mediclaim. If they don’t, it’s because their office covers them. But where critical illness is concerned, there is a lot of ambiguity.
Here I clarify your doubts.
Most importantly, Mediclaim only covers your expenses when you are hospitalized. It also covers pre-medical expenses for 30 days prior to hospitalization and post medical expenses 60 days after being discharged. But, in the case of critical illness cover, you are given the benefit whether or not you are hospitalized.
For instance, you may be diagnosed with cancer but not hospitalized. Nevertheless, you are paid your cover. Your Mediclaim comes into effect only when you are hospitalized.
Secondly, it is only recommended to people who have a history of certain illnesses in their family; critical illness cover will only include certain illness. Moreover, it provides a welcome financial boost at a time of emotional stress and financial hardship.
Let’s say you have a critical cover for Rs 1, 00,000. You are also covered by Mediclaim for the same amount. If your bills amount to Rs 75,000, you will get Mediclaim (Rs.75, 000 or less) as well as the critical Illness cover (Rs 1, 00,000).
The critical illness cover is not a substitute for medical insurance cover; it complements Mediclaim
For instance, if you had a kidney failure and needed a kidney transplant, a Mediclaim policy may not cover donor expenses. So the money you get from a critical illness cover will take care of it.
Here I would like to mention features of one of the good Critical Illness policy available in the market.
ICICI Prudential- Crisis Cover

• Benefit amount paid on diagnosis of any of the 35 Critical Illnesses, Total permanent disability or death.
• Lump sum benefit
• Benefit amount will be paid in addition to payment received by you from other medical insurance plan
• The Full Sum Assured as chosen under the plan is paid in the event of Death or Total Permanent Disability of the Life Assured.
• Coverage continues even after claiming benefit on select critical illness (in case of sum assured of more than Rs.10 lakhs)
• Long term coverage upto 75 years of age.
• Eligible for tax benefits on premium paid u/s 80C & 80D of the Income Tax Act, 1961
This is just one policy that I am speaking of, there are many other such policies provided by various companies.

So to summarize critical illness insurance is a most valuable benefit, some see it as more valuable than life cover as the benefit can be actually available before you die. I am sure most of you don’t have critical illness cover, so speak to your insurance agent or Financial Planner as they will be able to recommend the right product for you with the right level of cover and make sure you are adequately protected!!!

email2friend

This entry was posted on Friday, February 20th, 2009 at 12:17 am and is filed under Mukesh Dedhia's published articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.