Critical Illness Cover: Meaning, Benefits, Coverage and Exclusions

Key takeaways: 

• Critical illness cover gives you monetary support in case you are diagnosed with one of the conditions covered under the policy. 

• The medical illness and conditions which are covered can be different between different insurers. 

• A critical illness cover not only supports you during the medical illness but also helps you to plan your future more efficiently. 

Bonus tip: 

Do you know? ICICI Prudential Life Insurance has introduced a “ICICI Pru Wish” which is developed in collaboration with “Reinsurance Group of America (RGA)”. The aim is to target critical illness and surgeries specific to women. 

One critical condition and your entire savings can be used. Critical illness cover is designed to manage the exactly same situations. It is a type of health insurance that helps you with a lump sum amount when you are diagnosed with a critical illness or condition. 

Imagine, fire breaks out in your house and you need a fire extinguisher to handle the situation. You hope you never require it but for emergencies you keep the extinguisher at your house. In the same way, critical illness cover in India is used to support financially when diagnosed with a serious illness or condition. 

For example, Neha buys a critical illness cover by Aditya Birla of ₹10,00,00. After 4 years, she is diagnosed with cancer which is covered under her policy. She will get ₹10,00,00 as a lump sum amount for her illness under the critical illness covered by Aditya Birla. Neha can use this amount for treatment or travel costs. 

What is Critical Illness Cover in India? 

With an increasing cost of medical treatments and healthcare. Critical illness cover provides monetary support to you in case any critical condition is diagnosed. Critical illness cover provides a lump sum amount to cover healthcare expenses like treatment, medicines, travel to hospitals etc. 

According to Martin Lewis, the founder of a well-known website “Money Saving Expert”, critical illness cover means tax free lump sum amount. It is provided to you in case you are diagnosed with some critical condition covered under your policy. Martin Lewis recommends his readers to check their employee benefits and life insurance policies to know if they cover such critical illness. 

Serious health problems are unexpected and critical illness cover is a way to handle the burden of paying treatment costs. If you have other outstanding loans like home loan or car loan, the amount from illness cover can help you deal with the EMIs as it can be used as your income substitute in critical conditions. 

For example 1, some of the critical illnesses covered under the ICICI prudential are kidney failure, brain surgery, coma, deafness etc.

Example 2, critical illness covered by the Aditya Birla is a plan to compensate for the loss of income and cover the treatment cost in case you are diagnosed with a critical condition. Under the critical illness covered by Aditya Birla, you get up to ₹1,00,00,000 for extensive therapies and surgeries for 64 covered conditions. 

What is life insurance? 

Life insurance is a type of insurance that helps to support and protect your family members who depend on you by providing a lump sum tax free amount when you die. 

To have life insurance, you pay a monthly amount to the insurer in exchange for a coverage amount. In any unfortunate event, if you die and the policy is active, your beneficiaries will get the amount. 

Life insurance and critical illness cover
 

Both life insurance and critical illness cover plays an important role. Life insurance provides support to your family members who depend on you, in case you die. On the other hand, critical illness cover provides a short term monetary support when you are diagnosed with any critical illness and you are unable to cover the expenses and work for income generation. 

Together, life insurance and critical illness cover makes a powerful health safety net in case your life takes an unexpected turn. 

How much critical illness cover do you need? 

The amount of critical illness cover you need depends on various factors and some of them are as follows: 

These are some of the factors you should consider before choosing your critical illness cover. 

Conclusion: 

Overall, critical illness cover plays an important role in your life to meet short term requirements in case of any critical illness. It helps you with a lump sum amount when you are diagnosed with a critical illness or condition.  There are a number of factors that you should consider before choosing the coverage plan like age, family history, lifestyle habits or any ongoing loans etc. 

FAQs: 

What is the main similarity between life insurance and critical illness cover? 

Both life insurance and critical illness cover provides you and your family members monetary support in case of any unfortunate event or illness. 

What to choose between critical illness cover and income protection insurance? 

You should choose income protection insurance if your priority is salary to pay EMIs for outstanding loans. In case you want one time lump sum amount for any critical illness, go for critical illness cover. 

Is critical illness coverage even worth it? 

Yes, with an increasing cost of medical treatments and healthcare. Critical illness cover provides monetary support to you in case any critical condition is diagnosed. 

What is the benefit of a critical illness policy? 

Critical illness policy provides a short term monetary support when you are diagnosed with any critical illness and you are unable to cover the expenses and work for income generation. 

Is life insurance or critical illness cover worth it? 

Both life insurance and critical illness cover provides you and your family members monetary support in case of any unfortunate event or illness.