A critical illness policy, unlike a traditional health insurance plan, covers some of the most common critical ailments that can affect a person. It is a type of health insurance where the policyholder gets a lump sum amount of the sum insured if he/she is diagnosed with a terminal illness. The advantage of such insurance is that you get the entire amount of the sum insured right when the disease is diagnosed. Once the lump sum payout is triggered, one’s critical illness insurance plan can’t be renewed again.
The most common type of terminal illnesses covered under the critical illness insurance plan are:
- Heart attack
- Organ transplant
- Kidney failure
- Bypass surgery
- Heart valve replacement
What is covered under the critical illness insurance policy?
The most common type of critical illnesses are mentioned above, but the number of diseases that insurers cover may vary from one insurance company to another. Most insurance companies cover 8-20 major types of terminal illnesses; some might cover even more.
How much will be covered?
The medical expenses involved in treating critical illnesses can typically be several lakhs of money and might render one to break existing investment or borrow money from relatives and banks. Additionally, contracting a chronic terminal disease also negatively impacts the earning potential of the individual; while looking for a critical illness insurance policy, one should always look at an optimum coverage, considering that the entire amount is provided to the insured on the detection of the disease.
Like most health insurance critical illness insurance policies also have a 90 days waiting period at the beginning of the policy. It means that if the insured is diagnosed with any critical illness within the first 90 days of purchasing the policy, he will not be covered by the claim. Additionally, the insured also needs to survive for 30 days after the critical illness is diagnosed to make a claim.
Difference between medical insurance and critical illness insurance cover.
Medical insurance works on providing recurrent benefits. It means that if a person gets hospitalized multiple times in a particular year, he can get medical benefits from his medical insurance provided his claim amount does not exceed the limit of the sum insured. On the flipside, critical illness cover offers a one-time benefit, i.e., if the insured is diagnosed with a critical illness within the policy term, then he can get the entire lump sum of the sum insured at once.
The prerequisite for filing a critical illness insurance claim is that the insured gets diagnosed with the disease irrespective of whether they are admitted to the hospital or not. The prerequisite for filing a claim for medical insurance is that the insured needs to be admitted to the hospital for more than 24 hours. Critical illness conditions are excluded in regular medical insurance plans.
While applying for critical illness insurance cover, keep in mind to mention all your medical history and condition to the insurance provider before getting the policy.