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8 Factors to consider before choosing a Critical Illness Insurance

Choosing a critical illness plan requires some important consideration of factors such as covered illnesses, definitions, etc. Read on to learn more about these important factors.

  • Mar 29, 2023
Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

    Key takeaways

    11 factors to consider before choosing the best critical illness insurance:

  • Covered illnesses
  • Definitions
  • Exclusions
  • Sub-limits
  • Premium
  • Renewal
  • Claim settlement ratio
  • Survival period
  • Increasing age
  • Present health condition
  • Future medical expenses.

To overcome the limitation, you require a critical illness insurance plan. When you acquire such insurance, you receive a lump-sum payout if you are diagnosed with any of the illnesses covered under the policy. The funds can 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 unavailable. Moreover, a critical illness may leave you incapacitated, which means you may not be able to work, resulting in income loss.

Best critical illness insurance in India plans is 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.

Did You Know?

28.1% of buyers disclosed the reason for buying critical illness insurance plan as protection for the family in the event of sickness or death.

11 Important Factors to Consider while Choosing the Best Critical Illness Plan

The majority of insurance providers provide critical illness coverage. To select the best critical illness plan, one must comprehend and take into account many criteria.

Here are eleven things to think about:

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 the help of your family doctor to understand the terms and conditions in the policy document.


Most critical illness insurance plans in India 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 if you are diagnosed with a specific illness. The sum assured reduces by the sub-limit amount.


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 must 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.

Increasing Age

The likelihood of developing serious diseases like heart attack, diabetes, paralysis, etc., also rises with age due to the complexity of health situations. Furthermore, compared to standard therapies, the cost of medical care for such disorders is significantly higher. Therefore, you may protect your finances by being prepared and purchasing insurance for such eventualities. It is a good idea to purchase the best critical illness plan coverage if you are a senior citizen or have a senior family member.

Present Health Condition

Dread diseases may develop in the future due to an inactive lifestyle and work stress. In order to maintain their financial security, people who work in high-pressure environments should get coverage. When choosing the best critical illness insurance coverage, one of the key determining elements should be your current health and lifestyle. Additionally, it’s a good idea to get critical illness insurance early on if your family has a medical history of a critical disease.

Future Medical Expenses

Many people think they can cover the cost of medical care in the event of an emergency, given their current income. However, India is experiencing a sharp rise in healthcare inflation. Therefore, while purchasing any sort of insurance, it is important to take into account your future financial situation and any lifestyle changes. You can acquire the most comprehensive protection against critical illnesses with a critical illness insurance policy for a reasonable rate. Therefore, it is advised that you and your loved ones should purchase a sufficient critical illness policy.

Who Can Buy a Critical Illness Insurance Plan?

The following groups of people benefit most from having critical illness insurance coverage.

  • Older people
  • Individuals who have experienced a serious illness in their family history
  • Those that work under a lot of strain
  • People over the age of 40

Wrapping Up

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.

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Ref. No. KLI/22-23/E-BB/2435


- A Consumer Education Initiative series by Kotak Life