8 Factors to consider before choosing a Critical Illness Insurance

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8 Factors to consider before choosing a Critical Illness Insurance

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  • 19th Dec 2018
  • 3,159

8 Factors to consider before choosing a Critical Illness Insurance

Before understanding critical illness insurance, knowing the meaning of critical illness will be beneficial. Critical illness is a serious medical condition with incapacitating effects on your normal lifestyle. Additionally, you may require spending a huge amount for treating a critical illness. In some cases, you may be unable to work resulting in a loss of regular income.

The number of people suffering from critical illnesses is on the rise. One important factor leading to this increase is the stressful lifestyle and unhealthy habits. The financial impact of being diagnosed with a critical illness may be huge and your regular health insurance policy may not be sufficient to cover the same.

To overcome this limitation, you require a critical illness insurance India plan. When you acquire such insurance, you receive a lump sum payout in case you are diagnosed with any of the illnesses covered under the policy. The money may be used to meet your treatment expenses or to pay for your regular monthly costs. This reduces the financial burden while you are being treated.

Need for critical illness insurance coverage

A life insurance plan pays death benefits to the beneficiaries in case of the policyholder’s demise during the policy duration. Health insurance is an indemnity plan, which covers the cost of hospitalization and some other expenses. Both these may not be appropriate to cover the financial impact of a critical illness.

In case of a critical illness, the benefits of a standard health insurance policy and life insurance plan are not available. Moreover, a critical illness may leave you incapacitated, which means you may not be able to work resulting in income loss.

Critical illness insurance India plans are also known as fixed benefit policies. This means if you are diagnosed with any of the covered illnesses, the insurance company pays the policy benefits irrespective of the treatment costs and other related expenses. Some of the commonly covered critical illnesses include cancer, liver disease, kidney failure, stroke, multiple sclerosis, heart attack, and many more.

8 Important factor to consider to choose the best critical illness plan

Most of the insurance companies offer critical illness policies. A critical illness insurance comparison table online will help you make the right choice. Here are eight factors you must consider:

Covered illnesses

If a plan covers more illnesses, the premium will also be higher. Therefore, you need to clearly understand the inclusions and exclusions before making your decision.


As a common man, you may not understand complex medical terms. It is recommended you take help of your family doctor to understand the terms and conditions in the policy document.


Most critical illness insurance India plans do not cover pre-existing conditions during the waiting period. Such coverage may be available for a higher premium. Moreover, you must check the medical conditions that are excluded from the policy.


Insurance companies often levy sub-limits for different types of medical conditions. The insurer will pay this amount in case you are diagnosed with the specific illness. The sum assured reduces by the sub-limit amount.


A comprehensive coverage is more expensive and it is recommended you understand your personal needs and health conditions to make the accurate choice. Moreover, as you grow older, the premium increases.


When you are looking for critical illness coverage, it is important to opt for a policy that offers life-long renewal. This ensures that you have coverage as you age because the probability of suffering from such conditions increases, as you grow older.

Claim settlement ratio

Opting for an insurer with a higher settlement ratio is crucial for your peace of mind. This increases the possibility of your claim being settled in case the need arises.

Survival period

Several insurance policies include a survival period clause. According to this clause, you need to survive for a specific period after diagnosis to receive the benefits under the critical illness policy. The survival period is different for various diseases and knowing these beforehand is important.

Having understood the importance of a critical illness policy, you may check online for a critical illness insurance comparison table. Such a table compares various policies, their terms and conditions, and inclusions and exclusions on a single page, which makes it easier for you to make a decision.

- A Consumer Education Initiative series by Kotak Life

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