Dos and Don'ts While Buying Critical Illness Insurance

Posted on: May 18, 2021 | | Written by:

Dos and Don'ts While Buying Critical Illness Insurance

Published on May 17, 2021. EST READ TIME: 4 minutes

Throughout our lives, we hear this constant refrain – healthy food, exercise and good habits keep diseases away. Incorporating these practices into your daily lifestyle is an excellent way to ensure that you keep healthy and happy. However, the human body is not invincible against illnesses or injuries despite healthy practices. Moreover, the increasing costs of treatment, thanks to ever-rising medical inflation, add to the stress of having been diagnosed with a critical illness.

What is critical illness insurance?

While regular health insurance policies covers your medical and hospitalisation expenses, a critical illness cover pays out a good lump sum in the event that the policyholder is diagnosed with a serious disease such as cancer or paralysis, or needs bypass surgery or organ transplant. It is prudent to purchase such a critical illness cover over and above your health insurance. In fact, a number of life insurance plans have the option of availing an additional cover for critical illness at a small premium. The payout from such a plan can help you meet treatment expenses, make the lifestyle changes required for recovery, or make up for income lost.

Factors to consider before purchasing a critical illness cover

Before investing in a critical illness insurance cover, you must consider a range of factors and what you should and should not do before making your decision. Many of these considerations will be similar to those you may have kept in mind while buying a health insurance plan.

Dos

Check for the illnesses covered in the policy: The number of illnesses covered under a critical illness policy differs between companies. The diseases covered by companies may also vary. You should compare these plans and choose based on your needs. It is equally important that you peruse the policy to identify the diseases not covered under the plan.

Estimate the cover amount: Even before you start researching the different critical illness policies, you should determine the sum of money you expect to be paid in case of an eventuality. You must keep in mind your everyday expenses, repayment of loans or EMIs before arriving at this figure. Also ensure that your target sum covers your hospital bills and loss of income, while also maintaining a small, sustainable premium for the long run.

Learn about the claims process: It is important that you understand the process of raising a claim so that you can speedily complete the formalities when the situation presents itself. Know what documents are required, and what hospitals service the policy so that you can raise the claim in a timely and efficient manner. Before deciding, you should also research the insurance company's settlement history and track record.

Check for benefits upon renewal: Most critical illness policies have to be renewed every year and providers often give out benefits to those policyholders who have not filed claims. When you are comparing plans, see which benefits are provided under each policy and choose according to your needs.

Don’ts

Don't forget to research the insurance company: Before you commit to a plan, thoroughly research the insurance company. Get a sense of its credibility and reputation and watch out for the amount of premium. Make sure you read the fine print and check for the survival clause, claims process and its history of making settlements.

Don’t replace family health insurance with critical illness cover: You cannot replace your family health insurance with a critical illness cover. Critical illness policies are targeted at terminal diseases only and do not cover your entire family. A family health insurance plan, on the other hand, is more comprehensive in its scope.

Don't forget to check if it's a standalone policy: Like mentioned earlier, a critical illness insurance policy can be a standalone policy or an add-on to a health insurance policy. The claims process and premium amount will be based on these factors, which is why you should have a clear idea about the nature of your plan.

Don’t buy a plan without understanding it: It is never a good idea to put your money into something that you do not understand. Invest in a critical illness plan only after weighing all your options and going through the details properly.

Conclusion

Think of a critical illness cover as an additional layer of security on your health plan. Whereas your family health insurance will cover hospitalisation and treatment expenses, a critical illness insurance policy gives you the financial support to tide over a medical crisis of larger proportions, without dealing a blow to your savings.

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

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