What are the exclusions in critical illness plans?
What are the exclusions in critical illness plans?

Medical emergencies can take a huge toll not only on our physical and mental well-being but also on our financial health. With the time it takes to treat and cure critical illnesses, the journey to recovery can be long and arduous. To make sure that you don’t end up losing your savings, you need to have a health insurance policy with critical illness insurance. While we always look at the inclusions to evaluate the scope of coverage, we often miss looking at the exclusions. Well, let’s take a closer look at the exclusions in a critical illness policy so you can make a well-informed decision.
What is Critical Illness Insurance?
Critical illness insurance is a type of insurance policy that covers critical or life-threatening illnesses, such as stroke, cancer, kidney failure, paralysis, etc. As critical ailments require extensive care and treatment, they can affect your finances. A critical illness plan will ensure your savings are protected in these trying times, and you focus on getting back on your feet. On diagnosis of a covered illness, you will receive a lump sum payout from the insurer, which will help you manage both medical and non-medical expenses. The insurer will not ask for any bills but only proof of diagnosis of the illness to provide compensation.
You can buy critical illness insurance as an add-on to your existing healthcare plan or a standalone policy.
Features of Critical Illness Insurance
Some key features of critical illness insurance are –
• Lump sum payment:
If you get diagnosed with a covered critical illness, the insurer will pay a lump sum amount, irrespective of the actual expenses incurred. This amount is not restricted to medical expenses; you can utilise it for miscellaneous expenses, such as compensating lost income, meeting day-to-day expenses, paying off debts and/or other financial obligations. However, to avail of the compensation, you must survive a certain period after being diagnosed with the ailment. This timeframe is called the survival period, which can be 14 to 30 days, depending on the insurer.
• Coverage for critical illnesses:
Although the number of illnesses covered may vary from insurer to insurer, some life-threatening illnesses covered include cancer, stroke, heart attack, kidney failure, paralysis, brain tumour, multiple sclerosis, etc.
• Tax benefits:
In addition to financial protection, you can avail of a tax deduction under Section 80D of the Income Tax Act on the premium paid towards the policy, thereby reducing your tax liability.
• Shorter waiting periods:
Critical illness plans have a shorter waiting period as compared to standard healthcare policies.
• Easy claims process:
For claiming compensation, you don’t have to provide any bills or documents. Only proof of diagnosis of the ailment is enough.
What are the Exclusions in Critical Illness Plans?
Some common exclusions in critical illness plans include –
• Any critical ailment diagnosed within the waiting period is not covered.
• Illnesses or medical conditions you have been diagnosed with before purchasing the policy are not covered.
• If the insured dies within the survival period, he/she is not eligible for compensation. Critical illness plans come with a survival period of 14-30 days, which means the insured has to survive this period after being diagnosed with a critical illness.
• The insurer will not compensate for the claims filed during the waiting period. Most health plans have a waiting period of 90 days for critical illnesses.
• Self-inflicted injuries or attempting suicide
• Illnesses or injuries developed due to war, terrorism, or civil unrest
• Injuries/illnesses sustained in hazardous activities or jobs
• Injuries/accidents due to participation in adventure sports
• Injuries/accidents while participating in defence operations, whether it’s Army, Navy, or Air Force
• Illnesses developed due to smoking, alcohol consumption, or substance abuse
• Sexually transmitted diseases
• Infertility treatments
• Cosmetic surgeries and dental treatments
• Treatments done abroad
Who Should Buy a Critical Illness Insurance Plan?
• If a critical illness, like cancer or kidney ailments, runs in the family, you have a high likelihood of getting it. Hence, those who have a family history of critical illnesses must purchase a critical illness insurance policy.
• Those above the age of 40 are at an increased risk of developing critical illnesses.
• Those working in high-pressure work environments as they are at high risk
• Those who are the sole earning members of the family must consider investing in a critical illness insurance plan. The claim amount can be used for compensating loss of income, daily expenses, or paying the fees for children’s education.
Critical Illness Insurance Vs Health Insurance Plan
Even though both plans provide financial protection against medical expenses, there are some differences between the two, such as –
1. Coverage:
Critical illness insurance covers only critical/life-threatening diseases covered by the policy. Health insurance, on the other hand, covers diseases, accidents, as well as critical illnesses.
2. Payout:
Upon diagnosis of a covered critical illness, a critical illness plan will provide a lump sum amount, irrespective of the actual costs incurred. However, in the case of health insurance, you can claim the medical expenses in actuals.
3. Survival Period:
Only if you survive a certain period, can you avail of the compensation under a critical illness insurance plan. In a health insurance plan, there’s no survival period but a waiting period.
Conclusion
While buying a critical illness insurance policy, reading both inclusions and exclusions is essential to understand if the plan meets your medical needs. So, assess your requirements, research the plans, compare them, and finally take a call based on what you need.
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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