Critical Illness Plan

Critical Illness Plan or Critical Illness insurance policy is the one that covers the insured against the life threatening illnesses such as cancer, heart attack, kidney failure, paralysis, stroke, etc.

It is an insurance product where the insurance provider makes a lump sum payment to the insured in case the insured is diagnosed with a specific or a predefined illness during the tenure of the policy. This lump-sum amount can be used for meeting the treatment expenses incurred by the policyholder.

What is a Critical Illness?

Critical Illness is a health condition which is of a serious nature. It is an illness that has a debilitating effect on the individual and his lifestyle which can lead to incurring of huge amount of treatment cost along with loss of income and inability to work.

What are the features of Critical Illness Plan?

• It provides coverage for around 36 major serious illnesses like tumor, kidney failure, stroke, heart attack, etc.
• The insured gets a lump sum payment for the treatment of the illnesses covered in the plan.
• The claim processing is easy when the illness is diagnosed.
• The coverage is usually provided at the end of the waiting period.
• The lump sum amount received can be used as a part of the income by the insured.

Advantages of Critical Illness Plans

Having a critical illness plan offers the following benefits to the policyholder:

1. It helps in protecting your savings from depletion as the lump sum amount received can be used for meeting the treatment expenses.
2. The lump sum amount received from a critical illness plan can be used for meeting other expenses like maintaining your lifestyle, paying EMI’s, etc.
3. Some critical illness insurance plans have multi-claim option available in them which means you can have multiple claims during the tenure of the policy.
4. Critical illness plan ensures you have a financial back-up and hence acts as an income replacement in case you encounter a critical illness.

Factors to keep in mind while buying a Critical Illness Plan:

There are various factors you should keep in mind when selecting a critical illness insurance plan for yourself:

1. Pay attention to the sum assured as the amount of cover that you get under a plan plays an important role in determining which insurance policy works well for you.
2. Also decide whether you want to buy a standalone critical illness plan or a critical illness insurance rider. A standalone policy offers a greater coverage and charges a higher premium compared to that of a rider policy.
3. Check the sub-limits offered by the insurance provider under a critical illness plan as this may have repercussions to be borne by the policyholder in terms of cost.
4. What are the other inclusions and exclusions of the critical insurance policy you have opted so that you have a better understanding of your critical insurance plan?
5. The age at which you are buying the critical illness plan. This is important as senior citizens being prone to critical illnesses need to pay a higher amount of premium.
6. Check if the coverage under the policy is for a specific age or is for lifetime. Also check the maximum age up to which, as an insurance policyholder, you can renew the policy.
7. All the critical illness plans come with a waiting period. Pay attention to the waiting period offered by a plan at the time of buying it. As per the insurance experts, it is better to purchase a critical insurance plan with a longer waiting period.