Why health cover alone may not be sufficient A standard health cover policy is usually meant to cater to the expense of hospitalization, surgery, and some medical treatments. However, when it comes to critical illness like cancer, stroke, or heart disease, expenses are far greater than the expense of being hospitalized. You can expect to experience long periods of recuperation, loss of earnings, cost of rehabilitation, and lifestyle changes not even covered under a standard policy. That is where a bespoke critical illness cover can be useful.
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Understanding critical illness insurance Critical illness cover provides a lump sum payment to the policyholder on diagnosis of a serious illness covered under the policy. As opposed to health insurance, which compensates actual medical charges, this compensation can be used for anything—covering the cost of expensive treatment, paying for family expenses, or replenishing income that was lost. In India, some typical illnesses covered are cancer, kidney failure, major organ transplants, and multiple sclerosis, and the cover ranges from a few lakhs to more than ₹1 crore depending on the policy.
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When to include critical illness cover As a precaution against a history of lifestyle diseases, stressful jobs, or having meagre savings, critical illness cover is a reasonable addition. It can be taken by young employees to freeze attractive premiums, or persons aged 40 and 50 who may require it as there is greater likelihood of becoming seriously ill. It is also highly important to self-employed people, who do not have the advantage of employer-provided sick pay or income protection insurance and could lose financially heavily if they are unable to work for significant periods.
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Balancing health and critical illness plans The best option is not to have to choose between the two, but to utilize them together. Your medical insurance can pay for hospitalisation and treatment, and critical illness cover is a safeguard against non-medical bills and loss of income. In this way, you will not have to resort to drawing on your long-term reserves or selling assets while recovering, which would put you back significantly on your targets.
Assessing the appropriate policy terms and sum assured As you choose a critical illness policy, consider how much on average India charges for serious diseases and how much income you want to replace while you are recovering. Read the fine print to understand what waiting periods, exclusions, and specific list of illnesses that are included. The majority of these insurers now offer riders that can be added to your existing health cover at a lower cost than buying an independent policy, thereby making coverage according to your needs easier.
