Choose The Right Critical Illness Plan

Do you need extra insurance for life-threatening critical illnesses when you already have a mediclaim? Most of us would feel that it’s not needed and why should they clutter their portfolio?

May be your health insurance plan is good enough to cover you against illnesses, but what if you are diagnosed with a critical illness that requires specialised care? Mediclaim or health insurance plans generally have a limit or a cap on hospitalisation costs, doctors’ fees, intensive care unit, medicinal costs and, thus, may not cover the entire costs incurred for the treatment? So if your bill is more than the limit specified, you may end up burning a hole in your pocket.
Since the treatment involved in curing critical illness like cancer, heart disease, kidney failure, etc. can extend anywhere between one month to a year, you may have to take a sabbatical leave. This may lead to a loss of income for that period of time. The financial burden could be far more than what your mediclaim would cover. A critical illness insurance plan can help you overcome these shortcomings.
While your mediclaim covers hospitalisation, a critical illness insurance plan covers major critical illnesses by paying a lump sum amount on the diagnosis of serious illnesses pre -listed in the policy document.

The lump sum amount received can be used for various purposes such as to pay for expensive and advanced treatments, cover for loss of income due to a critical illness or pay EMIs/debts.

Both health plan and critical illness insurance plan provide benefits in different ways. A critical illness plan can complement your mediclaim.

The purpose of a critical illness insurance plan is paying for expensive treatments, covering for loss of income. Critical illness insurance is also cheaper than mediclaim. For instance, mediclaim for a 30-year-old healthy male, non-smoker with a sum insured of Rs 5 lakh can cost around Rs 8,000 a year. A critical illness policy with the sum assured of Rs 15 lakhs for the same person can be around Rs 2,651 a year.
This is because your mediclaim covers a wide range of health related risks and is therefore expensive than a critical illness insurance plan that covers specific illnesses. A combination of mediclaim and critical illness insurance plan can provide a balance between pricing and coverage.

Below are some points that can be considered while buying a critical illness policy.
The number of illnesses covered: Critical illness insurance plan provides fixed benefit. The policyholder receives the full sum assured irrespective of the hospitalisation or the cost of treatment. However, the number of critical illnesses covered varies. For example, plans provided by Aegon and HDFC life only cover Cancer whereas some plans from Edelweiss Tokio Life cover multiple critical illnesses like cancer, kidney failure, heart disease, etc.

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The sum assured you need: It will be easier to decide how much protection you need, if you know the benefits of the product. Factors like treatments costs, income loss and future financial liabilities will have to be considered by you. You can decide on the amount needed once you have considered all the above factors. Also it is important to consider your existing cover under your mediclaim policy. Some companies do provide sum assured as high as Rs 1 crore at reasonable premium amount.

The premium amount: While you may be looking for a critical illness plans that cover major critical illnesses and provide higher sum assured, it is also important to consider a plan that is reasonable and offers you a good premium amount. Some plans like Edelweiss Tokio Life – CritiCare+ do provide a 5% discount on online purchase.

A Standalone critical illness plan or a rider – what should you choose?
While a critical illness plan can be bought as a standalone policy, critical illness riders are typically clubbed with life insurance plans.

Standalone plans offer more flexibility in selecting the sum assured and also provides larger covers. The sum assured under a rider usually as a limit which is the same as the base policy. For example, if you have a term plan with a sum assured of Rs 20 lakhs and you opt for a critical illness rider along with it, your sum assured for the rider can’t be more than Rs 20 lakhs.

The other advantage of a standalone critical illness plan is that it is not mandatory to renew your term insurance plan if you want to keep only the critical illness insurance cover. But if you opt for a rider you have to continue with your term plan because it is clubbed with your term plan.

Buying a critical illness insurance plan is an important decision, it is recommended that you analyse your needs and then choose the right critical illness plan.

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