Need For Critical Illness Insurance Plan

Mumbai, October 12:  In today's fast paced life, there's been a steep rise in life-threatening diseases or critical illnesses like heart attack, cancer, renal failure and others. Otherwise fit person also runs the risk of critical illness due to hereditary issues.

The smartest way to deal with such life-threatening diseases is to have a critical insurance plan. Having a mediclaim or family floater plan may not always be enough to tackle terminal illness and hence it's advisable to have another alternative in critical illness insurance plan. Mainly because a mediclaim is an indemnity plan where the expenses incurred for an illness are reimbursed while in case of a critical illness plan, a lump sum amount similar to that of sum insured is paid to the insured in case of diagnosis of terminal diseases like stroke or cancer. Benefits of critical illness insurance plans are defined and full sum insured are paid to the insured regardless of the expenses.

This sum insured could help in treatments, which run into lakhs, for terminal diseases. The sum insured could also act as a replacement for heavy income loss caused due to life-threatening diseases, thus ensuring financial security for our family in the most assured manner, which generic health insurance cannot provide. A critical illness insurance cover also provides tax benefits under Section 80D of the income tax act.

What diseases are covered?

The list of critical illnesses covered under an insurance plan varies from insurer to insurer. However, a lot them provide coverage for over 30 types of diseases including:

- Cancer

- First heart attack

- Open heart replacement or repair of heart valves

- Coma up to a certain severity

- Major organ/bone marrow transplant

- Motor neuron disease with permanent symptoms

- Kidney failure

- Stroke resulting in permanent symptoms

- Permanent paralysis of limbs

- Multiple sclerosis

-  Major burns

-  Loss of speech

How much coverage is required?

With increasing medical costs, we know that bills could run in lakhs and it's difficult to gauge the right amount of coverage. However, considering that a terminal disease could also lead to debts, loss of income, it's advisable to have a coverage of 4-5 times of the annual income.

When to buy?

Insurance companies generally provide critical illness insurance plans for customers aged as young as five to senior citizens. Policies could provide coverage till a special age or forever depending upon the plan and renewal could also be restricted till a certain age. It's important at the time of purchasing the policy to look for details like maximum renewal age and duration of coverage. Also, such plans may need a pre-policy medical checkup but may not be required in case the prospective customer is under a certain age, like 40-45 in cases of various insurers.

Important thing to note

One of the most important things to note for critical illness insurance plan is the waiting period, which varies from company to company. A waiting period means the insured would only be able to avail benefits of the plan after the end of the waiting period. It's advisable to buy a plan with minimum waiting period. The common waiting period requires the insured to survive 30 days after the diagnosis of terminal disease to make the claim. Also, in many cases any critical illness diagnosed within first 90 days could lead to loss of coverage.