A Comprehensive Guide On Critical Illness Insurance

Critical illness insurance provides the insured with a lump sum payment if diagnosed with a critical illness. Right now, of diagnosis, you heard it correctly. In most cases, the sum assured received by the insured is tax-free. A typical critical illness insurance policy may appear expensive, but considering the valuable benefits, it is well worth the cost. 


The following are the most common critical illnesses covered by this plan: 

  • The heart attack 
  • Stroke \sCancer 
  • Transplantation of organs 
  • Paralysis 
  • Blindness 
  • Disability 
  • Terminal illnesses 

Why should you invest in a critical illness plan? 

Well, for the simple reason that it serves a unique purpose that neither life insurance nor health insurance does. Life insurance can pay a lump sum if the insured passes away but not a dime if the insured survives a critical illness. Most health insurance plans have explicit exclusions for acute diseases. 

Here’s a medical fact that proves the wisdom of purchasing critical illness insurance. 95% of people with heart attack survivors, but it takes a long time to recover financially and return to their previous lifestyle. The statistics for stroke and cancer patients are startlingly similar. A critical illness diagnosis is a life-changing event that can shatter one’s dreams and drain all of one’s savings.  


Currently, when rising medical costs continue to haunt the commoner, getting critical illness insurance is the best way to protect yourself financially against unforeseen medical expenses. 

Keep an eye out for – 

  1. Illnesses covered:  

The diseases covered by critical illness policies vary greatly. Most insurers cover eight crucial conditions, but some can cover up to twenty. 

  1. Understand the agreement:  

Take note of the sum assured by a plan and any additional health insurance benefits such as hospital cash and surgical benefits. Another question to consider is how extensive the insurer’s hospital network is. 

Read the small print carefully – When purchasing critical illness insurance, it is essential to understand the inclusions and exclusions. It is also important to consider the claim process and the waiting period clauses. 

  1. Insurer credibility:  

The insurer’s claim settlement ratio over the last few years is essential when purchasing critical illness insurance or health insurance plans for family. 

Remember to – 

When applying for critical illness insurance, you should specify whether you have a medical condition. One medical condition may occasionally give rise to another medical condition later in life. As a result, you must tell your insurer the truth about your medical history. Many insurers require applicants to undergo a medical exam as a condition of receiving critical illness coverage. 

Quick features: 

  • It provides a one-time fixed benefit and should be used only when treatment costs are incredibly high. 
  • So, if one is diagnosed with a critical illness during the policy period, he receives the lump sum in full at once. However, the benefit is only available until the policy is renewed. 
  • A critical illness must be diagnosed before you can file a claim (irrespective of whether the insured was hospitalised) 
  • It covers expenses incurred not only for hospitalisation* or treatment but also for past-due debts and lost income due to illness.

Plan evaluation 

Critical illness insurance is available as a standalone and a rider on a health insurance plan, with nearly identical features. It will be your final call on which form you want to purchase it. However, experts believe it works best as a good health insurance plan rider. 

** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.

## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale. 

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