What is critical illness cover and how does it work? Why buying this plan has become a must today?

Updated: Nov 11, 2018 5:33 PM

According to surveys by different global and national healthcare organizations, one out of four individuals in India is at a high risk of dying from critical diseases before the age of 70.

critical illness cover, critical illness insurance, CI health insurance plan, mediclaim, critical illness policy, critical illness riderA critical illness plan works a bit differently from the usual Mediclaim or health insurance cover.

We all must accept the fact that these days we are easily falling prey to life-style diseases, which is not good at all. According to several surveys by different global and national healthcare organizations, one out of four individuals in India is at a high risk of dying from critical diseases like cardio-vascular ailments or cancer even before the age of 70. To avoid such a situation, sticking to a healthy lifestyle and following a regular exercise routine can be surely helpful. However, at times due to some genetic reasons and mostly with the growing age, the chances of developing a life threatening disease remain constantly high. And unlike other minor ailments, the treatment for critical lifestyle diseases is extensively high and can easily run into several lakhs.

In case you already hold a health insurance plan in the form of a Mediclaim or Family Floater Cover, it is really appreciated. However, considering the given scenario, it would be wise to create a second financial buffer by investing in a standalone Critical Illness (CI) health insurance plan. A CI plan is usually suggested to people in their early 40s as the chances of developing a critical illness are quite high during that stage, though buying early also helps as the health risks are relatively less in that age, so the premiums are comparatively cheaper.

How Does A Critical Illness Plan Work?

A critical illness plan works a bit differently from the usual Mediclaim or health insurance cover. Under a CI plan, the insurer pays the policyholder a lump sum amount, equal to the total sum insured upon acquiring any of the serious aliments listed under the policy. The total amount paid to the insured can be used to pay for the cost of treatment, recuperation expenses and even to pay off the debts if taken due to the disease.

How much is covered?

With the cost of good healthcare rising constantly high, it is quite obvious that the total cost of critical ailments would typically touch several lakhs. It is not always possible for a middle class Indian family to arrange the amount instantly and therefore they either resort to borrowing money from their relatives or breaking the existing investments. Most of the times, a critical disease even renders the earning capacity of the patient. So, it is always advised to buy a Critical Illness cover only after considering several factors including type of job, gamily history, age and medical costs. As per industry experts, it is always suggested to buy a cover above Rs 15 lakh considering the current medical inflation. A person would at least need this much amount for proper treatment and rehabilitation from the illness.

What All is Covered?

The numerous illnesses covered under a critical illness plan vary from one insurer to another. Usually, most of the insurers cover 8 to 20 major critical illnesses and sometimes even more. Some of the most common illnesses that all insurers cover include heart attack, coronary artery bypass surgery, cancer, kidney failure, aorta surgery, stroke, paralysis, heart valve replacement and major organ transplant. The coverage amount for these illnesses can be anywhere from Rs 2 lakh upwards.

How much is the Waiting Period?

One of the most prominent features of a critical illness plan is that the insured person needs to survive for just 30 successive days just after diagnosis of the critical illness. However, some insurers even offer policies that ask for zero to 28 days of survival after diagnoses of the critical illness to make a claim. The policy itself also has 90 days waiting period at the start of the policy and any critical illness diagnosed within the first 90 days of taking the policy will not be accepted for a claim.


Critical Illness cover is usually a fixed benefit plan where the insurer pays the entire sum assured as a lump sum to the policyholder in case a critical illness is detected. The CI plan is offered by both life and health insurance companies as standalone policies. Some of the most prominent options available in the market include Future Generali Life Insurance Heart and Health Insurance Plan that covers more than 50 critical illnesses. Some other great option to choose is Apollo Munich Health Insurance Optima Vital that covers over 35 critical illnesses and Max Bupa Health Assurance’s Criticare that covers 20 diseases.

(By Vaidyanathan Ramani, Head-Product and Innovation, Policybazaar.com)

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