• 21st May 2024

How Do Critical Illness Insurance Plans Work?

Any form of illness to you or in your family is worrisome. Having a healthy and active lifestyle is something that unarguably goes a long way in maintaining your health, but a health insurance policy has become an absolute necessity too.

With increasing incidences of illnesses like heart ailments, organ failures, cancer, and more, there is a need for health insurance plans that protect from these gruesome diseases. Identifying the need for lakhs of individuals, insurance companies have introduced critical illness insurance plans.

What are critical illness plans, and how do they work? 

A health insurancepolicy that provides coverage for specific illnesses, which may be of life-threatening severity, is termed as critical illness insurance.

While being a health insurance plan, it does not follow the standard reimbursement process. Instead, it pays out a lump sum amount on the diagnosis of the illness. This lump sum payout can be used to avail treatment along with protecting other financial needs. It comes handy to pay for post-treatment or even other financial commitments.

Why should you consider buying a critical illness plan?

While the treatment for critical illnesses is possible (thanks to medical advancements), the cost of such treatment is going to touch the ceiling. At these times, an ordinary health insurance policy may not be sufficient to provide coverage. Also, some treatments may prove to be expensive that can consume your entire sum assured amount.

In case you suffer from any of these critical illnesses, it can hamper your income-generating capabilities. There can be loss of employment too. Moreover, a complete bed-rest may be required, which might further make it difficult to meet the treatment costs. Since the cash flows are increasing, there is a constant requirement to have a backup option in place. At such times, using a critical illness insurance plan can help create a backup for your times of financial distress. The lump-sum payout can be used to meet your other expenditures along with the cost of treatment and can make up for the loss of income too.

After your treatment, you might not be able to resume work with the same vigour. It may hamper your working hours too. Thus, to make up for the loss of income and provide financial backing, it becomes crucial to consider critical illness policy as a part of your financial plan.

What should you look at when buying a critical illness cover?

Before you purchase any health insurance policy, make sure you compare it with available options. You can make use of a health insurance premium calculator to get the best deals at affordable prices. The following are some of the points that need to be compared when buying a critical illness policy –

  • The coverage for various diseases.
  • Specific exclusions under your policy.
  • Be familiar with the claim process well in advance along with the stage of illness when the payout is made.
  • The waiting period for the diseases covered by your policy.

Lastly, when shortlisting a favourable policy, make sure you also consider your income, age and personal liabilities that need to take care of. While these are some points to be looked at when buying a critical illness policy, do not miss on comparing the available options at hand.

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