Critical Illness Insurance Plan Vs. Disease-Specific Insurance

In India, given the plethora of options available to choose from, buying the right health insurance policy can be a daunting task. The type of insurance policy you purchase plays a vital role in getting the right coverage to suit your specific needs. Today, with the changing needs of the people, many insurance companies offer critical illness and disease-specific insurance plans. These policies help you get financial protection against medical exigencies.If you are confused, which policy to choose? Here are a few critical things you must know about these policies.

As the name suggests, a disease-specific insurance plan covers the full treatment cost for a specific disease through all the stages, right from diagnosis to advanced treatment. One of the significant features of this insurance plan is that the insurance companies waive off the future premium upon diagnosis of the diseases as per the policy’s terms and conditions.Also, unlike the critical illness plan, since the disease-specific policy covers only one disease, the premium for such policies are comparatively cheaper. This makes it an ideal choice of insurance cover for those looking for a low-cost policy and get protection against a specific disease that they are most prone to. This type of insurance can also be the right choice if you have a family history of a particular disease like cancer.

What is covered under the plan?

You can buy a disease-specific insurance plan for a wide range of diseases like diabetes, cardiac ailments, stroke, diabetes, kidney ailments, etc. Most recently, the insurance companies provide disease-specific insurance plans for COVID-19 and dengue. If you are diagnosed with the disease, the insurance company pays the sum assured in a lump sum to meet the medical expenses.

What is the waiting period for a disease-specific plan?

One of the most important reasons why many people prefer buying a disease-specific insurance policy is that it does not have any waiting period. This means, upon diagnosis of the disease, you can immediately file a claim. The insurer will pay the sum assured amount after verifying the claim.

What is the ideal sum assured for disease-specific insurance?

If you are looking for disease-specific insurance , you must know what disease you want to get insured. Generally, experts recommend buying an insurance plan with a sum assured of about Rs. 10 lakhs. However, you can purchase a plan with a higher sum assured to get additional financial security. Just like investing, educating yourself about the right insurance is vital to make the right choice.

Critical illness insurance policy is specifically designed to cover specific potentially life-threatening diseases like cancer, heart attack, severe burns, organ transplant, stroke, etc. Under this plan, the insurance company pays a lump sum amount equal to the sum insured post the diagnosis of the illnesses covered under the plan.You can use the amount to pay for the treatment expenses, post-hospitalisation expenses, and even pay off the debt (if any). The insurer has no restriction on the usage of the amount.

What is covered under the plan?

Generally, most insurance companies cover about 8-20 illnesses under the critical illness plan. And, since the plan offers more comprehensive protection than disease-specific insurance , it has a higher premium.

What is the waiting period for a critical illness plan?

Under critical illness plans, the insured must survive for at least 30 days after the diagnosis of the critical illness before making a claim. However, some insurers offer plans with 0-28 days of surviving period.In terms of the waiting period, most critical illness plans have a waiting period of 90 days. This means claims made within 90 days of issuing the policy are not covered under the policy.

What is the ideal sum assured for critical illness insurance?

The treatment cost for critical illnesses can sometimes run into several lakhs. To ensure that you get sufficient coverage, you must consider important factors like medical inflation, age, family history, etc., and choose the sum assured accordingly. In general, a policy with a sum assured of Rs. 15-20 lakhs is considered ideal.

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.