Critical Illness Insurance
Let us understand what is critical illness insurance cover with the help of an example:
Anil Sharma was suddenly diagnosed with a serious disease called muscular dystrophy. The doctors told him that his treatment would last many years, thus, resulting in heavy medical expenditure. Anil had bought a health insurance policy of ₹10 lakhs. However, the insurance company informed him that it would take care only of its hospitalisation expenses, and therefore, he himself would have to bear the cost of treatment. With such a heavy financial burden to bear, Anil was unable to seek the necessary treatment, thus, resulting in permanent disability.
Should Anil have bought a critical illness plan in addition to paying for a health insurance policy?
Critical disorders are different from common health problems. As opposed to the latter, the former have a damaging impact on health resulting in death or disability, thus, resulting in heavy expenses on the patient’s medical treatment. Elevating healthcare costs and the pervasiveness of critical illnesses prompted many insurance companies to sell critical illness health insurance plans that are different from health insurance policies.
Why Is Critical Illness Policy Important?
More people are now suffering from critical disorders than before owing to shifts in lifestyle habits, rising pollution levels, stress due to work pressure and many other reasons. Common examples of critical illnesses include heart attack, massive stroke, major organ transplantation, kidney failure, dialysis, paralysis, multiple sclerosis, bacterial meningitis, viral hepatitis, muscular dystrophy, etc. This explains why people must consider buying a critical illness insurance plan that secures them against heavy medical costs in the long run. Critical illness insurance is useful for people
- Who do not have enough savings to pay towards the treatment for severe health problems
- Who is not covered under any group health insurance scheme or does not receive any employee benefit packages to look after in the event of sudden illness.
Apart from the fact that critical illness policies defray the treatment costs of serious health problems, some of them also include benefits of free health checkups. Those buying health insurance policies can either opt for cashless benefits or choose to get the hospitalisation expenses reimbursed by submitting the hospital bills. Policyholders paying towards critical illness plans do not have to be necessarily hospitalised to seek the coverage benefits. It is enough that the patient has been diagnosed with a particular critical disorder listed in the plan to seek the critical illness benefits in a lump sum.
In addition, all these plans offer tax benefits as the premiums paid towards these policies are subject to deduction from under Section 80D of the Income Tax Act 1961.
Insurance companies may cover different kinds of critical illnesses in the critical illness insurance plans that they sell. Before buying a critical illness plan, it is important to go through the policy details carefully and read about all the illnesses that are covered under the policy. However, there are a few essential things to consider while buying a critical illness insurance cover. So, let us discuss those in the next section.
