What is critical illness insurance and how can it help you?

critical illness insurance

While people understand the importance of buying a life insurance policy and a health insurance policy, they rarely realise the importance of critical illness insurance. This insurance policy is equally important to help prepare for your future. Read on to know more.

What is a critical illness insurance?

The insurance policy secures you against the expenses that may arise if you are diagnosed with a life-threatening illness, like cancer or a heart disease, among others. It provides a lump-sum amount which you can use for the treatment. It includes a significantly higher coverage as compared to a health insurance policy.

How does a critical illness insurance policy help?

The sedentary lifestyle that most of us now live, we are more prone to deadly and serious illnesses like heart disorders. Besides, some illnesses pertaining to the heart, liver, or other organs can also be genetic. In such a scenario, it is best to stay prepared. A critical illness insurance policy can help us be financially prepared in case of such an eventuality.

The insurance policy offers you coverage for up to 36 life-threatening diseases, like cancer, heart ailments, organ failures, etc. You can claim the policy benefit if you are diagnosed with any of the covered illnesses within the policy term.

Here are some additional benefits of this insurance policy that can be beneficial for you.

1. Acts a replacement for income

If the bread-winner of the house has been diagnosed with serious illness, it might affect the household income. A critical illness policy is extremely useful in such a scenario. You can use the payout to pay for the treatment and a part of it can act as an income replacement.

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2. Tax benefits

The policyholder is eligible for tax benefits under Section 80D of the Income Tax Act of 1961. These benefits are subject to change. Consult with your tax advisor for more clarity on this.

3. Coverage of multiple costs

Unlike a health insurance policy, the critical illness policy pays out expenses even without hospitalisation. This policy also covers other treatment expenses, like consultations, tests, and medicines, will also be covered for you.

4. Easy claim processing

The claim processing of this policy is pretty easy. If you get diagnosed with a covered illness after the waiting period, you can claim the lump sum with a valid diagnosis report.

What does a critical illness insurance cover?

The insurance policy covers up to 36 life-threatening illnesses. The diseases covered may vary from one insurer to the other. However, the following ailments are generally covered in the policy:

  • Cancer
  • Heart attack (first time)
  • Kidney failure and dialysis
  • Organ transplant
  • Liver ailments
  • Lung disease
  • Motor neuron disease (ALS)
  • Other heart ailments
  • Paralysis of limbs

Ensure that you check all the inclusions before you purchase the policy.

Serious illness and ailments can strike without warning; and if it is not diagnosed immediately, it can be deadly. By purchasing a good critical illness insurance plan, people can safeguard their financial condition in such circumstances.