Critical Illness Insurance: Benefits, Features, Claim Process, and More

All About Critical Illness Insurance - BimaBandhu
Critical illness insurance, also known as critical illness health insurance, refers to the specific type of health insurance that covers the insured individual against various life-threatening diseases.

Let’s consider an example to understand the importance of critical illness insurance in life – 

Mr. Shah was diagnosed with a serious illness when at work. When hospitalized for the treatment, his wife was more worried about his health than the financial impact of this emergency. It is because she knew that her husband has bought a health insurance policy and always paid the premium on time. However, when she turned to the insurer for claim settlement, she was told that the claims were rejected as Mr. Shah suffered from a critical illness that was not covered under the purchased plan. 

Like Mr. Shah, many of us rely on our health insurance plans for financial assistance in case of a medical emergency. However, not all of us know about the need for the best critical illness insurance in life. If you are in search of the best health insurance plan, you must know well about critical illness health insurance. Let’s get started. 

What is Critical Illness Insurance? 

Critical illness insurance, also known as critical illness health insurance, refers to the specific type of health insurance that covers the insured individual against various life-threatening diseases. These include heart attack, cancer, renal failure, kidney failure, and many others. Getting good quality treatment for these critical health problems can take a toll on the insured’s finances. It is where critical illness insurance can help you stay healthy while also keeping your savings intact. 

Need for a Critical Illness Insurance Policy 

The importance of buying health insurance that covers critical illnesses can be realized from the fact that these illnesses are on the rise in India. Major non-communicable diseases that are more prevalent in India include cardiovascular diseases, cancers, neurological disorders, and chronic kidney diseases. 

By having critical illness insurance cover, you can avoid facing any financial stress in the event of diagnosis and treatment of any severe illness. Besides this, it is also important for you to understand how to buy the best critical illness insurance in India. 

Who Should Buy Critical Illness Health Cover? 

Type  Reason 
Salaried individual  Paying for the treatment of critical illness using a limited salary amount can be challenging. 
Individuals above the age of 40  There is a high risk of suffering from critical health problems at this age. 
People having a medical history of specific critical illnesses  Hereditary critical illnesses can pass to the next generation in a family, thus increasing the risk of developing the illness amongst the family members. 

 What are the Features of Critical Illness Insurance? 

Given below are the common features of a critical illness insurance policy: 

  • Comprehensive critical illness coverage for a wide range of illnesses as specified in the policy document 
  • Extension of insurance coverage for a limited period 
  • Total and permanent disability coverage 
  • Easy claim process 
  • Lump sum payment in general 

** The exact feature of any health insurance plan may vary from each other as defined by different insurers. 

What are the Benefits of Critical Illness Insurance Plans? 

Certain unique benefits of critical illness health insurance policies make them different from various other types of insurance, such as the following: 

  • Financial support to get the best quality treatment when diagnosed with critical illnesses 
  • Wide range of illnesses covered as defined in the policy document 
  • Adequate coverage that can also act as a substitute for income 
  • Availability as add-ons or stand-alone insurance policy 
  • Affordable premium 
  • Tax deductions under Section 80D of the ITA, 1961 

How Does Critical Illness Insurance Work? 

Most of the insurance plans that provide critical illness coverage work by providing financial benefits to get treatment for major critical health problems. Although each plan may have certain unique clauses, most of them work in a similar manner. Here’s how: 

  • When the insured gets diagnosed with any of the critical illnesses listed in his/her policy, he can file a claim to get the required benefits. 
  • Once submitted, the claim is checked and then approved by the insurer. 
  • The critical illness insurance policy benefits are then provided in the form of a cashless facility in the network hospitals or via claim amount reimbursement. 

You can easily check the approximate premium of these plans using the critical illness insurance premium calculator. 

How to Buy Critical Illness Cover? 

Given below are the common steps to buy critical illness insurance in India: 

  • Select a suitable critical illness insurance policy (either a stand-alone policy or a health plan with critical illness add-on) 
  • Select adequate sum insured 
  • Check the list of illnesses covered in the chosen plan 
  • Calculate premium payable using critical illness insurance premium calculator online 
  • Pay the premium after filling the proposal form and fulfilling any other formality 
  • Get the required medical tests done based on the individual health risks 

You can buy the policy either offline or online depending on your preference. 

Also ReadAll About Health Insurance Portability 

How to File a Claim Under Your Critical Illness Insurance Policy? 

Most claims under critical illness insurance are processed on the basis of diagnostic reports that confirms the underlying illness. Whenever you need to file a claim, start with contacting your insurance company to register a claim.  

Given below is the list of documents that are generally required to file a claim under critical illness insurance in India: 

  • Duly filled claim submission form 
  • Identity proof of the insured 
  • Medical certificate from a doctor that confirms the diagnosis of a critical illness covered under the chosen policy 
  • A detailed summary of discharge 

After submitting these documents, the insurer’s claim team will verify the same and then approve/disapprove the claim you submit. You should also know that the steps to file a claim may vary slightly from one insurer to another. Similarly, you can be asked about similar other documents at the time of claim submission.  

Difference Between Critical Illness Insurance and Health Insurance 

Many people who have a health insurance policy by their side do not know the difference between health insurance and critical illness insurance. It’s always good to learn from others’ mistakes than to suffer yourself to understand things better. 

Given below is the critical illness insurance vs. health insurance comparison table to help you understand the differences between the two: 

Critical Illness Insurance Policy 

Health Insurance Policy 

Provides insurance coverage for life-threatening diseases, like cancer, tumor, etc.  Provides coverage including hospitalization expenses 
Diagnosis is enough to get the benefits of the policy without hospitalization  Requires hospitalization to get the cashless facility at network hospitals or to get the bills reimbursed 
Covers more than 30 critical illnesses  Covers pre-and post-hospitalization expenses mainly 
Waiting period depends on the severity of the diagnosed critical illness  In general, the waiting period is 30 days 

 You can also check the difference in their premium using a health insurance and critical illness insurance premium calculator respectively. 

List of Illnesses Covered Under the Best Critical Illness Insurance Plans 

While most insurers offering critical illness insurance tend to provide maximum protection against all odds, the chances are that they do not cover some of the critical illnesses you expect to be covered. Hence, it is important that you check the list of critical illnesses covered under a plan before buying. 

Commonly, the following ailments or illnesses are covered under the best critical illness insurance plans in India: 

  • First-time heart attack 
  • Cancer (till a specific stage) 
  • Open heart coronary artery bypass grafting 
  • Coma (up to a certain degree of severity) 
  • Open heart replacement 
  • Heart valves repair 
  • Kidney failure 
  • Stroke 
  • Bone marrow transplant 
  • Organ transplant 
  • Permanent limb paralysis 
  • Multiple sclerosis 
  • Bacterial Meningitis 
  • Aplastic anemia 
  • Loss of speech 
  • Final-stage liver disease 
  • Major burns, etc. 

Disclaimer: This is just an indicative list. For the exact list of critical illnesses covered under different policies, read the policy documents carefully. 

Tax Benefits under Critical Illness Insurance – Detailed Analysis 

The premium you pay for critical illness insurance coverage makes you eligible for income tax deduction u/s 80D. Given below are the details of the tax benefits you can avail: 

  Premium paid for critical insurance coverage for  Maximum deduction under 80D 
Self, spouse, and children (dependent)  Parents 
Everyone falls under the age of 60 years  Rs. 25,000  Rs. 25,000 

 

Rs. 50,000 

 

When parents are above the age of 60 years  Rs. 25,000 

 

Rs. 50,000 (including expenses) 

 

Rs. 75,000 

 

Both you and your parents are above the age of 60  Rs. 50,000 

 

Rs. 50,000 (including expenses) 

 

Rs. 1,00,000 

 

 How to Select the Right Critical Illness Insurance Policy? 

You can consider the following parameters to zero in on the best critical illness insurance based on your preference: 

  • Select an adequate sum insured the corresponding premium of which is easy to pay 
  • Check the waiting period of the plan (it should be around 30 days from the policy start date) 
  • Check the survival period (to be 30-90 days 
  • Look at the number and details of the critical illnesses covered (between 4-35 diseases, may vary with different insurers) 
  • Consider the renewability age (which should either be maximum or lifelong) 

** This information may change as per the insurer’s norms. 

Factors to Consider While Buying for Critical Illness Insurance Policy 

  • Selection of adequate sum insured 
  • Type – standalone critical insurance policy or a rider offering similar benefits 
  • Sub-limits under the policy if any 
  • Your age 
  • Maximum renewal age 
  • Waiting period 
  • Policy inclusions and exclusions 

Most critical insurance policies do not cover the following cases: 

  • Diagnosis of covered critical illness within the waiting period 
  • Death of the insured within 30 days of critical illness diagnosis 
  • Critical illnesses developed due to congenital disorders 
  • Critical illnesses developed because of smoking, alcohol, tobacco, or drugs 
  • Critical conditions related to pregnancy or childbirth 
  • HIV/AIDS 
  • Dental care or cosmetic surgeries 
  • Treatment taken outside India 

You are advised to read the chosen policy document carefully for more details. 

Who All Should Buy Critical Illness Insurance? 

  • Individuals with a family history of critical illnesses 
  • Primary breadwinners in a family 
  • Individuals have stressful job environment 
  • Almost everyone above the age of 40 years 

List of Critical Illness Insurance Policies in India 

  • Bajaj Allianz Health Insurance 
  • Aditya Birla Health Insurance 
  • Bharti AXA Health Insurance 
  • Care Health Insurance 
  • Digit Health Insurance 
  • Edelweiss Health Insurance 
  • IFFCO Tokio Health Insurance 
  • Future Generali Health Insurance 
  • Raheja QBE Health Insurance 
  • Royal Sundaram Health Insurance, and many others 

Disclaimer: *BimaBandhu does not recommend or endorse any insurer or insurance products. 

You May Also Like to ReadList of Health Insurance Companies in India 

How Can BimaBandhu Help You? 

Getting quality treatment for a critical illness can make you lose your life-long savings. However, with the help of right critical illness insurance policy, you can secure both your health and financial future.  

At BimaBandhu, we are dedicated to providing detailed information about different types of insurance policies so that you can understand what’s best for you. On our insurance-information portal, you can find in-depth guides about health insurance, life insurance, and more. 

FAQs 

What is a critical illness? 

Critical illness refers to the diseases or ailments that can cause severe harm to our body. In terms of insurance, various insurance providers define and list critical illnesses in their policies. 

Why do you need critical illness insurance coverage? 

General, standard health insurance policies do not cover critical illnesses. Even if they do, the basic coverage may not suffice the expenses for critical illness treatment. This is where a critical illness insurance plan can be of great help. 

How much critical illness should I select? 

Consider your age, annual income, and lifestyle at the time of selecting the right sum insured. 

What are the documents required for critical illness insurance? 

In general, you will need an address proof, age proof, and identity proof. 

Why buy critical illness insurance online? 

It is easy to buy the insurance policy online and you can compare various plans before buying any of them.  

Who can benefit from buying critical illness insurance? 

Everyone, irrespective of their age or income, can benefit from buying this type of health insurance policy. 

Who All Can Buy Critical Illness Insurance? 

In general, the minimum age to buy a critical illness policy is 18 years till the age of up to 65 years. The actual eligibility for this insurance policy depends on the insurer and the specific insurance policy you select. 

What is term insurance with critical illness? 

Many term plans are available with critical illness riders, hence the name. You can either buy critical illness health insurance policies or term insurance with critical illness riders. 

 

 

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