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Key Factors to Consider When Comparing Critical Illness Plans

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Getting diagnosed with a critical illness, such as cancer, heart disease, or kidney ailment, can create significant mental and financial strain. As these conditions become more prevalent, purchasing a critical illness insurance policy and staying prepared for those uncertain times is wise. If you get diagnosed with a covered illness, the insurer will provide a lump sum payout to help cover your medical expenses. However, when purchasing a critical illness insurance cover, it is important to compare different plans and choose one that best suits your needs. Read on to learn the key factors to consider while selecting a critical illness insurance cover.

What is a critical illness insurance policy?

A critical illness insurance policy is a type of insurance product designed to provide financial protection if you are diagnosed with a severe illness covered by the policy. These illnesses typically include life-threatening conditions, such as cancer, stroke, heart attack, kidney failure, and other severe health conditions. In the event of a diagnosis, the insurer will offer a lump sum to help you cover your medical expenses, living costs, and other financial obligations, especially if you are unable to work during your recovery. This financial support can alleviate the burden of medical bills and lost income, giving you peace of mind during a challenging time.

Types of Critical Illness Insurance Coverage

There are two types of critical illness insurance coverage —

1. Standalone Plan

This critical illness plan is designed to cover severe health conditions. It offers more comprehensive coverage for a wide range of life-threatening health issues. Moreover, the policy can be personalised to meet your healthcare needs, including adjustments to coverage, waiting periods, and specific conditions. Since a standalone insurance policy offers more robust protection, the premiums are higher than those of an add-on policy.

2. Add-on Cover

You can also add a critical illness cover to your existing health insurance policy and access the benefits at a lower premium compared to a standalone policy. While this option is more affordable and convenient, the coverage is usually limited than a standalone policy. An add-on plan covers only certain conditions listed in the policy and may have a lower payout. Nonetheless, this coverage can be a cost-effective way to enhance the existing coverage of your health plan, ensuring financial support when needed.

Features of a critical illness insurance cover

The following are the key features of critical illness insurance cover —

1. Coverage for Specific Illnesses

The policy covers a pre-defined list of life-threatening conditions, such as cancer, kidney failure, heart attack, stroke, paralysis, organ transplant, Alzheimer’s disease, and more. A critical illness policy can cover up to 64 or more conditions.

2. Lump Sum Payment

If diagnosed with a covered critical illness, the insurer typically pays out a lump sum amount, and the policy ceases to exist. You can use the payout for your medical treatment in India or abroad, to pay loans, school fees, day-to-day expenses, and more.

3. Waiting Period

The policy has a waiting period of 30 to 90 days, so you can make a claim only after the waiting period is over. This helps prevent claims for pre-existing conditions or illnesses that existed before the policy was in force.

4. Survival Period

Many critical illness policies require you to survive for a certain period after being diagnosed with a covered illness to receive the payout. If you do not make it through the survival period, the insurer will not pay out the claim.

5. Policy Exclusions

A critical illness insurance policy only covers the conditions specified in policy terms and conditions. It typically does not offer coverage for pre-existing conditions.

6. Policy Renewal

Most critical illness insurance policies are renewed annually. However, policy terms and premiums may change over time, particularly as you get older or the status of your health changes.

Key factors to consider when comparing critical illness plans

The following are important factors to consider when comparing critical illness insurance plans —

1. Coverage Scope

When you are buying a policy, ensure that it covers a wide range of critical illnesses, such as cancer, heart disease, stroke, kidney failure, and more. Choosing a plan that includes the illnesses prevalent in the family is particularly important and relevant to your health risks.

2. Sum Assured

Check the sum assured or lump sum payout offered by the policy. Make sure it is sufficient to cover potential medical expenses, lost income, and other financial needs that may arise.

3. Premiums

Compare the premium amounts for similar coverage. While a lower premium may seem attractive and affordable, it may not provide adequate coverage. Therefore, do your calculation and choose an amount to ensure that the benefits and coverage meet your needs.

4. Waiting Period

Understand the waiting period before the coverage kicks in. Some critical illness insurance policies have a 30- to 90-day waiting period. Therefore, check the same and ensure you’re comfortable with the timeline.

5. Policy Terms and Conditions

Before you purchase this insurance cover, carefully read the policy terms and conditions. Remember to check the exclusions, waiting period, definitions of covered illnesses, and other terms to avoid confusion and surprises later.

6. Claim Process and Reputation

When purchasing a critical illness cover, remember to check the insurer’s claim settlement process and their reputation for timely payouts. It is wise to go for an insurer with a high claim settlement ratio for a smooth and hassle-free claims process.

7. Age Limits

Ensure the plan is available for your age group and covers the conditions you may be at risk of based on your age. Also, some plans may have entry and exit age limits, so make sure you check these as well.

8. Exclusions

Identify the exclusions in the plan to know what is not covered. Some critical illness insurance policies exclude conditions diagnosed within the first few months or pre-existing conditions.

Conclusion

If you are looking to purchase critical illness insurance cover, you must shortlist various plans and compare the conditions covered, the payout amount, waiting periods, exclusions, and other factors. Look for policies that offer comprehensive coverage for a wide range of critical illnesses, with clear inclusions and exclusions. You must also check the survival period and review the premium structure to ensure the policy is affordable. Most importantly, choose a critical illness health insurance plan that not only fits your budget but also provides the required protection to you and your loved ones in the event of a severe illness.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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