Critical illness cover under Health Insurance

Critical illness insurance which is also known as ‘dread disease policy’ counted as one of the most important insurance policies these days. Under such plans, the insurance company provides the insurer with coverage for specific life-threatening diseases such as cancer, heart attack, multiple sclerosis, kidney failure, etc that are pre-defined in the policy.

Let us take a more elaborate look at them in detail.

Benefits of Critical Illness Insurance Plans

Here are the benefits of critical illness insurance plans:

Payment in a lump sum- Under such plans, insurance company makes a lump sum cash payment to the policyholder if he/she is diagnosed with one of the specific illnesses on a predetermined list as part of an insurance policy. 

Tax benefit- Under such plans, you can avail of the tax benefits according to section 80D of the Income Tax Act, 1961. A policyholder can enjoy tax savings of up to Rs. 25,000, provided he/she is less than 60 years of age. Similarly, senior citizens above 60 years of age can get tax savings up to Rs. 50,000.

Easy claim processing– Hospitalization is not needed under these plans to make a claim. So, policyholders can easily file their claims based on their diagnosis reports in a hassle-free manner.

 It gives peace of mind- The policy gives you peace of mind as one can now concentrate more on their medical treatment rather than running around to arrange funds for meeting medical expenses.

What are the inclusions under Critical Illness Cover?

The list of diseases which are included under critical illness insurance plans are as follows-

  • Muscular dystrophy
  • Major burns
  • Fulminant viral hepatitis
  • End-stage lung disease
  • Deafness
  • End-stage liver disease
  • Loss of speech
  • Bacterial meningitis
  • Aplastic anaemia
  • Multiple sclerosis
  • Motor neuron disease that is associated with permanent symptoms
  • Permanent paralysis of the limbs
  • Major bone marrow or organ transplant
  • Stroke resulting in permanent disability
  • Kidney failure that needs regular dialysis
  • Coma of a specific severity

What are the exclusions under Critical Illness Cover?

The list of diseases which are excluded under critical illness insurance plans are as follows-

  • Treatment assisting reproduction
  • Treatment for hormone replacement
  • Treatment outside India
  • Cosmetic surgery or dental care
  • Infertility treatment
  • Terrorism, war, military or navy operations, civil riots
  • AIDS / HIV infection
  • Critical conditions due to childbirth or pregnancy
  • Illness due to an external or internal congenital disorder
  • Illness due to drug, alcohol, and tobacco consumption
  • Demise within 30 days from surgery or diagnosis of the critical illness
  • Critical illness detected within the first 90 days from the start date of the policy

Who should buy a critical Illness insurance Cover?

  • Those who have a history of critical illness in their family- Most of the critical illness diseases are hereditary i.e. they run in families. For example, the risk of cancer is higher, if you have a family history of that disease. So, as a proactive measure, you should get a critical illness insurance policy to enjoy a secure future and avail the best possible treatment. If you are already aware of your family’s medical history, then you should opt for a critical illness plan.
  • If you are the sole breadwinner of the family- If you are the only earning member in the family, it is imperative to secure the entire family with a critical illness insurance policy. It is required if you do not want your loved ones to go through emotional turmoil or financial distress post-diagnosis of a critical illness. 
  • People above the age of 40 years- People who are above the age of 40 years are more susceptible to developing critical illnesses. So, it is advised that they should buy a critical illness cover in their late 30s to ensure themselves against life-threatening diseases.

Bottom Line

With growing cases of life-threatening diseases like cancer, having a critical illness cover can go a long way in ensuring you and your family to avail of the best medical treatment without draining your life savings.