While regular health insurance offers adequate cover for minor ailments, what about a major disease that entails mindboggling medical treatment? Critical illness insurance is the answer. It provides the much-needed financial back-up in such a dire situation. Read on to learn more.

Critical illness whether to self or a loved one can be catastrophic. Besides causing emotional and physical distress, it can have a debilitating effect on financial health as well. The extensive treatment, hospitalisation, surgery, medicine costs, along with daily living expenses, utility bills and more can drain finances and sometimes wipe out the entire life’s savings.

This is where critical illness cover comes into play. It is designed to ease the financial burden that hits an individual in the wake of a medical crisis. Let’s learn a little about critical illness health insurance and why it is something most people should consider.

What is a Critical Illness Cover?

This is a type of health insurance policy that covers expenses triggered by a specific life-threatening ailment. The insurer pays the policyholder the entire sum assured once detected with a major illness. Proof of diagnosis is the only criterion.

There are various plans available under this category.  While some cover a few major diseases like cancer, heart attack, stroke, paralysis, kidney failure, sclerosis, and meningitis, etc. there are others that include a broad spectrum of illnesses.  A critical illness cover can be acquired as a standalone plan or as a rider to a base Mediclaim policy.

Benefits of Critical Illness Insurance:

  • If afflicted by a chronic medical condition outlined in the policy, a lump sum amount is sanctioned directly by the insurance company to the insured.
  • The plan takes care of all the expenses involved in hospitalisation, treatment, medicines, recuperation, health check-up, day-to-day needs and more.
  • A critical illness policy comes with tax benefits under section 80D.

Important Factors Associated with Critical Illness Health Insurance Plan:

  • A three-month waiting period from the onset of the policy is mandatory before you avail any benefit
  • A severe medical condition will be covered only if it has occurred for the first time in life
  • A pre-existing disorder or ailment should not spark the critical illness
  • A severe medical condition diagnosed in the first 90 days is generally not covered
  • Death within 30 days after diagnosis of a serious issue is not valid for claim
  • The plan doesn’t encompass issues arising from intake of alcohol, tobacco, and drugs
  • Critical condition due to pregnancy or childbirth is excluded
  • HIV/AIDS not included
  • Congenital diseases and injuries sustained during adventure sports or military operations are other exclusions

Bottom Line

The bitter truth is that a major illness can strike anyone at any point in life.  While people with a family history of serious medical issues may be a tad more vulnerable, there's no guarantee you will be spared. It, therefore, makes sense to be better prepared and add a layer of protection. Besides alleviating financial worry, it brings total peace of mind. However, before buying critical illness health insurance policy, make sure to scrutinise the terms/conditions to ensure complete clarity on the diseases covered along with the inclusions/exclusions. This is crucial to avert any shockers at the time of claims.

Learn more about Health Insurance Plans here.


The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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