Basis the dramatic increase in the cost of hospitalization expenses in India, having an adequate cover through a comprehensive health insurance plan is the only relief unless you have loads of extra cash at hand. Most of these health insurance policies are offered along with some attractive add-ons/riders for an added coverage.
Critical Illness is one such add-on that is offered by a various insurance companies that can be opted for at an additional premium. While we do not underrate the benefits of opting for a critical illness add-on along with the health insurance policy, a stand-alone policy is always favourable.
What is Critical Illness Plan?
Critical illness, as its name suggests, is an insurance cover that will protect you in the unfortunate event of a critical illness that can leave you unable to work again. Critical illness, although different from life insurance, is usually sold along with it. A critical illness cover usually covers you for a fixed amount, paid off in a single tax-free payment.
This one time lump sum pay out can then be used as per your requirements, may it be to tackle the expensive treatment costs or towards paying off the debts or for building the college fund for your children. So, just because you bought it as a part of your health insurance or life insurance policy, the benefits are not necessarily required to spend on the treatment costs alone. After all, it’s your money and you are free to use it the way you want.
Some of the common Critical Illnesses are:
- Kidney failure
- Heart attack
Types of Critical Illness Covers
There are different types of critical illness policies such as:
- Term critical illness policy – this pays out during the entire term of the policy
- Whole of life critical illness policy – this pays out only if you ever have a critical illness in your lifetime
- Stand-alone critical illness policy – this pays out once the critical illness is diagnosed
- Combined life and critical illness policy – this pays out only once, whether you have a critical illness or in case of death of the insured
How Does It Work?
If you have critical illness cover, you will be paid a lump sum amount by your insurance company if you are detected with any of the critical illnesses as per the policy wordings of your insurance plan. Please note that death is not the criterion to claim this amount. The insurance companies usually have a set of standards regarding the severity of the illness after which the lump sum amount is paid. The details of which are mentioned in the policy wordings that you must go through to know the nitty-gritties.
As mentioned above, if at all you come across a situation where you need to claim this policy, the proceeds can be used for any purpose including paying off for nursing care or even paying your mortgage.
Why Should You Buy It?
When you are young and healthy, your mind does not worry about serious health condition such as a heart attack or a stroke. But we all know, life presents itself with unbound uncertainties and unforeseen incidents. An unfortunate tragedy can happen at any time of your life, leaving you devastated mentally, physically and financially. A critical illness cover can help you provide some additional peace of mind and takes your worries away in case something unfortunate happens in your life, securing the financial well-being of your loved ones.
Some of the good reasons to buy the cover for critical illness are mentioned below:
- A critical illness not only drains you out financially at the time of hospitalization, but it may also leave you incapacitated to find employment and thus have long-term consequences on your finances.
- The sheer volume of hospital and medicine bills is too overwhelming, considering the costs involved in treating such ailments
- If your existing insurance plan does not cover the cost of treating the critical illness, you will be forced to liquidate your investments
- The lump sum compensation offered by a critical illness cover provides greater flexibility than a standard health insurance plan.
Important Things to Consider
While it may seem from the above that buying a critical illness health insurance is a sound thing to do, it does not undermine the importance of a regular health insurance policy. A critical illness cover should be taken to supplement your health insurance plan to help you with a lump sum amount at disposal at such crucial times.
In conclusion, with the major changes in our lifestyle clubbed with lack of exercise and unhealthy diet, our chances of suffering from critical illness is much higher than our forefathers. Hence, a need to cover ourselves adequately with the right health insurance policies to tackle the financial burden that may arise in future is the only way out. No matter which insurance provider you buy your critical illness policy from, make sure the coverage is sufficient as per your requirements. Evaluating the plans thoroughly and comparing them appropriately is the key for choosing the right plan.
Contributed by https://www.coverfox.com