Saroj SatapathyIdeal Insurance Brokers
One fine morning a telephone call jerked me out of sleep. My friend was on the other side. He said, “My father’s medical expenses are going to be high and treatment may go on for months. His mediclaim policy will only pay the hospitalization expenses limited to my policy amount. However, my father’s treatment will be extended and expensive.” I knew his father had stomach cancer and was under treatment so; I invited him over for coffee that same morning promising to solve all his doubts with workable solutions. With coffee already brewing I served him a nice hot mug to soothe him a little till I reviewed the papers.
After about half an hour or so when I looked up to him, he seemed calmer thinking he is in good hands, but unaware that his worries were about to start. I assured him he has his father’s mediclaim policy in place, which will limit the treatment till the policy value. However, a major slip up of not opting for a critical illness cover will affect his father’s prolonged treatment. If he had a critical illness cover (as an add-on or a rider) he would have received the much needed lump sum amount from the insurer and would have been able to afford a better and long drawn treatment for his father.
He did seem convinced but was devastated to know that he would have to bear higher expenses. Like him there are many who are unaware of such covers and the differences between them, sadly their insurance advisors too do not keep them well informed.
Mediclaim and critical insurance covers are different, unlike mediclaim policies which are around for a long time; critical illness policy is a comparatively new cover in the market. Both serve two different purposes and are absolutely different products. A mediclaim is a health insurance brand only offered by general Insurance companies in India and is a reimbursement plan. On the other hand critical illness is a benefit plan offered both by life and non-life companies. Currently, insurance companies cover anywhere between 12 to 20 critical illnesses under a single policy. To name a few critical illness: cancer, heart attack, major organ transplant like kidney, lung, pancreas or bone marrow, heart surgery, multiple sclerosis. A critical illness cover can be taken either as a standalone policy from any general insurance company or as a rider with one’s life insurance policy. As a rider under life insurance policy the premium remains constant through the entire term of the policy, thus the overall cost may remain lower than a standalone policy. Alternatively, in a standalone policy the premium is likely to change as you grow older. While opting as a rider under life insurance policy the critical illness cover will no longer be available if the policy is discontinued or matured.
Critical illness policy may not matter for the age group below 35. However, in case one is over 35 and there is a family history of critical illness then it is advisable to invest in a policy with critical illness riders either from a general insurance or life insurance provider. As one grows older chances of getting a critical illness cover of a higher limit reduces and is subject to medical examination along with further riders. It is essential to make sure that one reads through the exclusions mentioned in the policy document and they may like to consult their family doctor on the policy language/coverage/waiting period to see if it is fair to them. Depending upon the company, there is a survival period for the policyholder. In other words, to be able to avail the benefits of the policy, the holder would have to survive a minimum number of days. Often the minimum survival period for the holder is 30 days after the diagnosis of the critical illness. The contract will outline definite terms and conditions for the diagnosis of the illness. For instance, the diagnosis needs to be made by a particular physician or the holder needs to undergo a specific test to confirm the illness. It is only after the adherence to these conditions, the claim of the insurance will be settled.
As on date, the benefits offered by critical illness policy broadly are: cost of care and recuperation aid, tax benefit under section 80(D), free health checkups and expenses like donor expenses in a transplant surgery.
A standalone critical illness policy issued by a general insurance company offers more flexibility in choosing the sum insured and larger covers as compared to riders offered by the life insurers. To capture the entire thought in a sentence I would like to say: A health insurance or mediclaim helps to foot hospitalisation bills; a critical illness cover would safeguard one’s finances from major illness.
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