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Critical Illness Insurance: Meaning, Benefits, Coverage & More

A critical disease not only puts your life in danger but also your lifelong savings and the welfare of your family. Critical disease rates are growing sharply, and at the same time, the expense of treating these illnesses is also increasing exponentially.

In 2016, 31% of deaths (National Library of Medicine – Global Health & Medicine) worldwide were caused due to cardiovascular illnesses; and this number has risen ever since. Similar to how cancer used to be very uncommon, it is now present in practically every other home, either as a living or dying condition.

Each chemotherapy procedure may cost thousands of dollars, and there is no guarantee that the patient will return following treatment. Even those with health insurance sometimes lack the cash necessary to continue their care at the top facilities. However, there is another way to somewhat ease the financial burdens in the event of a serious illness. Want to know what it is? It is a critical illness insurance policy. Now, let’s escape any further delay and get straight to it.

What is a Critical Illness Insurance Plan?

A critical illness policy covers all life-threatening illnesses such as cancer, heart attack, stroke, bone marrow transplant, etc. When a critical illness covered by the health plan is diagnosed, compensation is given in a lump sum amount. This one-time payment can be used to cover the cost of medical care. In most cases, there is a 30-day surviving period, after which the claim is settled.

Which Conditions are regarded as Critical Illness?

As per IRDAI, critical illness refers to the following conditions and their associated treatments:

●      Primary pulmonary arterial hypertension

●      Cancer

●      Kidney failure

●      Total blindness

●      Major organ transplant

●      Coronary artery surgery

●      Coma

●      Heart attack

●      Stroke

These illnesses are all life-threatening, and the above-mentioned treatments are exceedingly expensive. In addition to having a standard health insurance policy, it’s important to cover certain diseases especially to protect your health and financial standing.

Reasons Why a Critical Illness Insurance Is a Must

A critical illness not only causes bodily suffering but also causes a strain on your finances. Hence, to protect your finances against such situations, it is crucial to acquire a critical illness plan in advance.

Here are a few reasons highlighting the importance of purchasing critical illness insurance:

  • Financial assistance: Your insurer will pay you a predetermined amount if you are found to have an illness that is covered by the policy. While recovering from the disease, you can use this money to pay for medical bills and other costs.
  • Multiple illnesses covered: A critical illness plan typically covers all of the common critical diseases. So, you don’t need to be alarmed if you are diagnosed with any of these. Reading the insurance documents will reveal the exact medical illnesses covered under the policy.
  • Source of Backup: It’s possible that a critical illness may prevent you from working. Your capacity to support yourself and your dependents might get affected by this. This massive amount received from your insurance provider might help you manage your spending better.
  • Goes well with your health insurance: The best financial defense against high medical costs is health insurance. Your coverage will be substantial if you add a critical illness plan along with your standard health insurance. Also, you’ll be able to manage your non-medical expenses better.
  • Availability of quality healthcare: Critical illness treatments are often expensive. You will be able to afford the finest treatments for any condition you may have if you have critical illness insurance.
  • Affordable premiums: Most critical illness covers are reasonably priced. You just need to pay minimal premiums in exchange for the substantial financial protection a critical illness policy provides.
  • Tax benefits: According to Section 80D of the Income Tax Act, money spent on purchasing a critical illness insurance policy is eligible for tax deductions. So, if you purchase one, you may take benefits of the tax savings it accompanies.

Is a Critical Illness Insurance Plan Right for You?

The number of individuals having life-threatening critical illnesses is steadily increasing. While the likelihood of having a critical illness is rising, the age at which it strikes is progressively declining. People as young as 20 and 30 are also contracting such deadly diseases. Thus, there is no predetermined standard for purchasing critical illness coverage. But in certain situations, it’s imperative that you think about getting a critical illness policy:

  • If critical illnesses run in your family: Critical illnesses are often caused by hereditary factors. For instance, if you have a history of cancer in your family, your chances of getting the illness are higher. Get critical illness cover as a preventative measure to enjoy a secure future and get the finest healthcare. Consider purchasing a critical illness plan if you are aware of your family’s medical history.
  • If you’re the lone breadwinner of the family: If you are the family’s sole source of income, it is essential to protect the whole family with a critical illness policy. It is necessary if you don’t want your loved ones to experience financial or emotional hardship after getting a critical illness diagnosis. Additionally, critical illness coverage compensates for the loss of income in addition to treatment expenses.

The truth is that a critical illness can strike anyone at any point of time in life. Although people having a medical history of serious illnesses might be more prone, there is no guarantee that you will be spared. It not only eases financial stress but also provides complete peace of mind. However, before purchasing a critical illness insurance plan, make sure to carefully review the terms and conditions of the policy to get a clear understanding of the illnesses covered as well as the inclusions/exclusions. This is essential to prevent any surprises while making claims.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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