Important things to look at while choosing a critical illness plan

By: |
September 23, 2020 4:00 PM

Health insurance policy with critical illness cover provides a pre-defined lump sum for the diagnosed critical illness.

group health insuranceGroup Insurance is not just offered by your employers only however even banks can offer a group health insurance plan to all its account holders

Most people are trying to get themselves insured especially given the pandemic but experts say there are a lot of things policyholders should look at before zeroing on a policy. For instance, depending on the need of a policyholder, one can also look at disease-specific policies, such as critical illness plans.

Subramanyam Brahmajosyula, Head – Underwriting and Reinsurance, SBI General Insurance, says, “Buying a critical illness cover (rider or standalone policy) with a regular health insurance policy helps in covering the overall cost of hospitalization.” While a standard health policy covers the policyholder for expenses incurred during hospitalization, a critical illness policy offers a lump sum benefit in case the policyholder is diagnosed with any of the named critical illnesses covered under the policy.

A health insurance policy with critical illness cover provides a pre-defined lump sum for the diagnosed critical illness. Additionally, the hospitalization expenses for treating critical illness is also covered. Experts say this ensures full protection even after the diagnosis of critical illness.

Here are some points that you should look at while choosing a critical illness plan;

  • Benefits in basic health insurance policy – Different insurers offer different benefits in their health insurance policies. Before choosing a right/suitable basic health insurance plan, conduct thorough research on the benefits of the policy and the ailments covered if you buy an add-on critical illness rider.
    History of family health – One of the essential aspects of health is the history of ailments running in the family. Hence, evaluate your family’s health history and consider purchasing critical illness cover with adequate coverage of the specific illness.
  • Illnesses covered – While buying a critical illness cover, experts say to look for the number of critical illnesses covered in a policy, as different companies have a different set of critical Illnesses covered in the policy.
  • Waiting period – There is a waiting period involved in critical illness plans. This waiting period starts from the date of the policy purchase until the time policy benefits kick in. Mostly, the critical illness insurance plans have a waiting period of 3 months to 4 years, after which a pre-specified illness is covered. So, experts say try to select a critical illness cover as early as possible.
  • Claim amount – Consider factors such as costs of treatment, medicine, and follow-up plans while deciding your sum insured. Brahmajosyula, says “Policyholders have the choice of opting for either a standalone plan or just a rider. Stand-alone plans, although more expensive, will allow policyholders a higher claim amount.”
  • Individual plan or family floater – You can buy a Critical Illness plan as an individual plan or even as a family floater. Note that some non-life insurers and standalone health insurance companies also allow CI to be added to a base Mediclaim plan. Based on the family members’ financial condition and medical history, you can decide to opt for either individual or family floater plan. Brahmajosyula, says “It is advisable to opt for a standalone critical illness policy as it offers the flexibility in choosing the sum insured and gives larger covers as compared to a family floater plan.”
  • Type of cover – If you are confused about getting a standalone or add on, note that standalone critical illness policy can be ported to other insurers, but critical illness rider alone cannot be ported.

Health insurance policy with critical illness cover provides a pre-defined lump sum for the diagnosed critical illness. Besides, the hospitalization expenses for treating critical illness is also covered, which ensures full protection even after a diagnosis of critical illness.

Should you consider a critical illness plan for your parents?

Brahmajosyula, says “There are multiple reasons basis which one should consider buying a critical illness plan for their parents. First and foremost, if there is a family history of critical illness, especially for a disease like cancer, the risk is higher. Under such circumstances, one should definitely opt for a critical insurance plan.”

Additionally, if you are a sole earning member of the family, medial costs involved in providing treatment for critical illness for any of your loved ones can be financially crippling. Hence, it makes sense to invest in an insurance policy.

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