Is The Health Insurance Plan Adequate to Cover Critical Illness?

Many health insurance policy buyers in India have this notion that their policy will cover the cost of all medical expenses. But, little do they realise that the standard policy may not be sufficient to cover the critical illness treatment cost. Some of the critical illnesses like cancer, kidney disorder, paralysis, and health ailments are life-threatening, but the treatment of such diseases can run into several lakh Rupees. If you are not sufficiently covered to meet such expenses, you may risk suffering from severe financial hardship.To put things into perspective, cancer treatment, including hospitalisation, chemotherapy sessions, medication, etc. can approximately cost Rs. 7-10 lakhs. Your standard health insurance policy may not be enough to cover these expenses. Not to mention, the standard policies have various limitations like sub-limit, co-payment, etc., which means you may have to pay a part of the bill from your pocket.So, to avoid such hassles and get full coverage for the treatment expenses, it is better to purchase critical illness health insurance. It is a must-have policy for all, especially if you have a family history of cancer or any other life-threatening illness. A critical illness healthcare plan is different from the standard policy; under the plan, the insurer pays a lump sum amount (equal to the sum insured) as soon as you are diagnosed with any critical illness, as mentioned in the policy documents.Also, unlike the regular health insurance policies, the critical illness policy does not have any limitation on the usage of the money. You can use the settlement amount to meet the treatment expenses, pay outstanding dues, or invest towards accomplishing your financial goals. Another significant feature of critical illness cover is that the lump sum amount you receive from the insurer is tax-free. And, once you receive the amount, the policy expires.Typically, the Mediclaim policies have the concept of a waiting period. Apart from accident-related emergencies, you cannot file a claim within the waiting period. In the case of pre-existing disease, the waiting period can range from one to four years. Such waiting periods can be a big burden if you are diagnosed with any critical illness, and the whole purpose of the insurance will be defeated. Final Word Regular health insurance cover may not be enough to fight a critical illness. It is better to purchase a separate critical illness health insurance to meet the treatment cost and get financial security.

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.