Why Critical Illness Coverage is Essential along with Health Insurance

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Summary: Life is extremely unpredictable. An innocuous-looking pimple may just turn out to be a cancerous tissue that begins to threaten your physical, emotional, and financial well-being. While your comprehensive health plan can help you start your treatment, its coverage scope may not be able to cover everything a critical illness unleashes. Having critical illness coverage provides the financial cushion needed to bear the costs associated with treatment, allowing you to focus on recovery while managing daily living expenses. Read on to learn why critical illness coverage is the safety net that is essential for you and your family.

Introduction

We often hear about someone getting diagnosed with critical ailments like cancer, kidney failure or suffer from a heart attack, stroke, paralysis at a very unfortunate juncture of one’s life. Yet, we carry on with our lives believing that there’s no chance we will suffer from the same. That’s precisely why when we buy a health plan, we don’t bother to include critical illness coverage in it. While it’s desirable not to have any symptoms that point toward a critical illness, there’s no harm in staying prepared, as the treatment for such ailments is not only expensive but also extensive. Let’s take a closer look at why a critical illness cover is important.  

What is Critical Illness Insurance?

Critical illness is a serious and life-threatening medical condition like cancer, heart attack, and paralysis, which requires long-term care and treatment. These illnesses often affect major organs of the body, and treatment costs can be higher compared to other ailments. This is where critical illness insurance can be your saviour by providing coverage for life-threatening illnesses as specified in the policy. If you or a loved one has been diagnosed with a critical illness, the insurer will pay a lump sum amount up to the sum insured, irrespective of the costs incurred. You can spend the amount for treatment, paying off debts, or other day-to-day expenses. 

Some illnesses covered under critical illness insurance are cancer, kidney failure, paralysis, heart attack, stroke, multiple sclerosis, and major organ transplant. 

You can buy critical illness coverage as a rider with your regular health insurance or as a standalone policy. 

Factors to Consider Before Buying Critical Illness Insurance

• Sum insured: This is the maximum amount you can claim from the insurer. As the cost of treating critical illnesses can be very high, you must select the sum insured wisely to ensure you are not in dire straits in tough times. Consider medical inflation and your healthcare needs while choosing the coverage amount. 
• Coverage: The policy must have a wide scope of coverage. So, check the list of critical illnesses and choose the insurer covering most of these ailments. While some insurers cover 15-20 such ailments, some insurance providers cover up to 99 critical illnesses. However, such comprehensive policies can be expensive. 
• Health condition: Are you a smoker? Does your work give you stress? Do you have a family history of chronic diseases? If yes, consider buying a critical illness policy without delay. Your current health status may be a significant factor in deciding whether you need critical illness insurance. 
• Maximum age for renewal: Buy a plan with a lifelong renewability feature because some plans have a cap on the maximum age for renewing your critical illness insurance policy.
• Waiting period: Like health insurance plans, a critical illness policy also has a waiting period during which you cannot avail of the plan’s benefits. The waiting period is usually 30 days from the date of policy purchase. So, check the waiting period before purchasing the policy. 

As medical expenses are rising by the day, a basic health insurance plan may not provide adequate coverage if you get diagnosed with a critical illness. Here are some reasons why you should buy critical illness insurance even if you have a Mediclaim policy:

• Health insurance covers only the medical expenses arising from an illness or injury. If you are diagnosed with a critical illness which may need a prolonged hospital stay, you can suffer loss of income. In such situations, critical illness insurance will be beneficial as the lump sum you receive from the insurer can be used for treatment as well as compensation for loss of income. This is particularly helpful for those who are the sole earning members of a family. 

1. In health insurance policies, you can use the claim amount only for medical expenses and up to the sum insured. But if you have critical illness insurance, you can use the money as you want – whether seeking treatment in a better hospital or paying for children’s education. 
2. A Mediclaim policy will not be sufficient to cover the treatment cost of critical illnesses.

• Those above 40 years of age: After the age of 40, our immunity slowly comes down, so there’s an increased risk of developing critical illnesses. Buying a critical illness plan in your late 30s is advisable to stay financially prepared and complete the waiting period. 

• Those with a family history of critical illnesses: Some critical illnesses are genetic. You are more at risk of developing illnesses, like kidney failure and heart problems, if they run in your family. Staying prepared with critical insurance coverage if there’s a family history of such ailments is wise. 

• Those with stressful jobs: Stress can lead to life-threatening diseases like heart problems, respiratory disorders, etc. Studies have also shown that high-stress jobs and critical illnesses are linked. Those working in stressful conditions should consider buying a critical illness policy as a financial backup. 

• Sole earning members: If you are the sole earning member and unfortunately get hospitalised for a prolonged period due to a critical illness, the lump sum compensation can be used for medical expenses, sustenance, paying off debts, and other requirements.  

Cases of critical illnesses are on the rise, thanks to lifestyle changes and other factors. While a regular health insurance policy can protect you in medical emergencies or other ailments, it may not be adequate to cover the treatment costs of critical illnesses. Critical illnesses require treatments which can be extensive and costly. Hence, buying critical illness insurance in addition to your healthcare plan is prudent so that your savings don’t get affected by these treatments.

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

References:

https://www.hdfcergo.com/health-insurance/critical-illness-insurance

https://www.livemint.com/money/personal-finance/factors-one-should-consider-when-buying-critical-illness-insurance-cover-11695921735254.html

Moneycontrol Journalists were not involved in the creation of the article.