By Shreeraj Deshpande
Critical illness policy is a necessity in today’s times with changing lifestyles and rising costs of healthcare. A critical illness insurance policy offers comprehensive coverage against life-threatening conditions and protects your finances.
According to the Global Burden of Disease Research, medical conditions including heart-related diseases and strokes resulted in 2.5 million fatalities in India in 2019, with the younger generation bearing the brunt of the burden. Similarly, cancer has become one of the top five causes of untimely deaths in India, with a projected increase to 29.8 million in 2025 from 26.7 million in 2021, according to ICMR statistics. As a result, it is essential to be aware of these life-threatening diseases and take preventative actions.
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Treatments to cure critical illnesses are usually lengthy and expensive making it difficult for a family with average income to afford prolonged treatment and other related costs. This makes critical illness policy a must-have insurance solution in today’s times. It protects the insured against critical illnesses that pose a serious risk to their life. Upon the diagnosis of a serious disease that is covered by the critical illness policy, the compensation is given in a lump sum amount that can be used to cover these high expenses.
Why critical insurance policy
The Critical illness policy is a ‘benefit-based policy’, which means that it will pay you the benefit based on diagnosis without critiquing your expenditures. You can use it to cover your monthly expenses, compensate for income loss, or medical fee. It offers tax advantages under Section 80D of the Income Tax Act for payments of premium.
In contrast to a traditional health insurance indemnity plan, a critical illness insurance policy provides a fixed benefit. It covers several significant medical conditions/ illnesses including cancer, end-stage kidney failure, primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, coronary artery bypass grafts (with surgery to divide the breastbone), aorta graft surgery, heart valve surgery, stroke, first heart attack, coma, total blindness, paralysis, etc. Each plan comes with its own list, which differs from plan to plan and from company to company.
One should purchase a critical illness policy having the widest covers in terms of number of illnesses covered and opt for an optimum sum insured. Ideally a critical illness policy should be purchased in addition to a indemnity policy covering hospitalisation and other expenses. The indemnity policy can be used to pay for the medical expenses while a critical illness policy will protect against the loss of income generation capacity of the individual due to occurrence of a critical illness and other related expenses.
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* The critical illness policy will pay you the benefit based on diagnosis without critiquing your expenditures
* Along with this, buy a indemnity policy covering hospitalisation and other expenses
The writer is head, Health Businesses, SBI General Insurance