Factors to Consider before Buying Critical Illness Insurance


In today’s day and age, modern lifestyle diseases are surging at a rapid rate. Maintaining a healthy diet and exercising helps in reducing the risk of lifestyle diseases. But life comes with its uncertainties, and you never know what may come ahead. Critical illness insurance safeguards you and your family from the financial burden that comes with a critical ailment.

A study suggests that one out of four people is affected by ailments such as stroke, cancer, heart attack, etc. And treatment of such diseases can burn a hole in one’s pocket as the cost runs in lakhs. You may think that your health insurance is enough for covering the cost of treatment. But daily care and living expenses are not taken by it. Hence, it’s advisable to have critical illness insurance along with regular health insurance.

Critical Illness Policy

A critical illness plan provides the policyholder with coverage against life-threatening diseases such as cancer, neurological disorders, renal failure, etc. It pays a fixed lump sum amount predefined if the insured gets diagnosed with a critical illness. The policy exclusively mentions the ailments that are included and not included. It differs from one insurance company to the other. So, before you zero down on a critical illness plan, here are few things that you must consider.

1 Pre-Existing Conditions

Coverage of pre-existing diseases depends on your insurer. Usually, there is a waiting period of four years after which most insurance companies cover such conditions. Some insurance companies do not cover pre-existing conditions no matter what. So, one should carefully inquire about the coverage of any existing ailments before finalizing a policy.

2 Survival Period

Survival period refers to the number of days the insured must survive after the diagnosis of any critical illness to claim the policy’s benefits. Mostly, a period of 30 days is considered by insurance companies. It can differ based on the disease diagnosed. The waiting period and survival period are different and should not be used interchangeably.

3 Covered Illnesses and Exclusions

A critical illness policy explicitly mentions the diseases that are included and not covered. Commonly, eight to twenty acute conditions are covered by insurance companies. A few insurers even cover more than 50 ailments. One should also focus on the exclusions mentioned in the policy. For example, a policy focused on cancer may exclude stroke or heart diseases.

4 Standalone Vs. Rider

A standalone critical illness insurance policy provides extensive coverage and thus invites a higher premium. Whereas a rider may provide coverage for the same diseases but the sum assured is way lesser than a standalone policy. It happens as a rider policy is based on a standard health policy, and the insurance amount remains the same irrespective of the treatment cost.

Critical illness insurance protects you and your loved ones financially. There are several types of plans out in the insurance market. It is vital to understand your options and compare them with thorough research. One should emphasize the inclusions and exclusions and the terms and conditions of a critical illness insurance policy.

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