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15 Factors to Consider Before Choosing a Critical illness Insurance

If you are looking to buy critical illness insurance, you must consider factors like coverage size, renewability, waiting period, and existing health issues.

  • 2,489 Views | Updated on: May 31, 2024

Choosing the right critical illness plan is important as it can provide you with financial security in case you are diagnosed with a critical illness. Before buying a critical illness plan one must consider factors like the sum assured, waiting period, coverage size and claim settlement process.

Receiving a diagnosis of a critical illness is a turning point in anyone’s life. Such an event within a family carries profound consequences, as a critical illness can completely shatter one’s morale. In an era where the cost of living and medical expenses are rapidly increasing, critical illness insurance is widely regarded as the most effective solution to combat the financial challenges associated with a critical illness. Funds from critical illness insurance can be used to reduce 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.

Having the best critical illness insurance 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.

15 Important Factors to Consider While Choosing the Best Critical Illness Plan

The majority of insurance providers provide critical illness coverage. Choosing the best critical illness plan is a crucial decision that requires careful consideration of various factors. Here are important factors to keep in mind while making this decision:

Waiting Period

Understand the waiting period associated with the critical illness plan. Some policies have a waiting period before you can claim for certain illnesses.

Coverage Size

Consider the extent of coverage provided. Opt for a plan that offers a substantial sum assured to cover potential medical expenses.

Claim Process and Renewability

Review the ease and transparency of the claim process. A straightforward and efficient claim process is crucial during times of distress. Also, check the renewability options of the policy. And choose a plan that allows lifelong renewability to ensure coverage throughout your life.

Conditions Covered

Examine the specific conditions covered under the plan. Ensure that it includes the illnesses most relevant to your health risks.


Consider the entry and exit age limits for the policy. Some plans may have age restrictions, so choose one that aligns with your current and future needs.

Financial Position

Assess your financial capacity to pay premiums regularly. While it is essential to have adequate coverage, it is equally important to choose a plan that fits within your budget.

Health Condition

Be aware of any pre-existing health conditions that might affect your eligibility or premium rates. Some plans may have medical underwriting requirements.


Clarify what is included in the policy, such as hospitalization expenses, post-hospitalization expenses, and additional benefits.

Inexpensive Premiums

While cost is a factor, prioritize value over cheap premiums. Ensure that the plan offers adequate coverage for a reasonable premium.


Understand any limitations of the policy, such as waiting periods, sub-limits, or exclusions for specific treatments.

Policy Tenure and Sum Insured

Choose a policy with a tenure that suits your long-term needs and a sum insured that adequately covers potential medical costs.

Check Exclusions

Thoroughly read the policy document to identify any exclusions or limitations that might affect your coverage. Understand the circumstances under which the plan may not provide benefits.


Research the insurer’s claim settlement ratio and reputation for timely claim settlements. A high claim settlement ratio indicates reliability.

Covers Lost Income

Look for features that cover lost income due to critical illness, ensuring financial stability during recovery periods.

Sum assured

Ensure that the sum assured is adequate to cover potential medical expenses and other financial obligations during a critical illness.

Who can Buy a Critical Illness Insurance Plan?

Critical illness insurance plans are typically available for individuals within a certain age range. The specific eligibility criteria may vary among insurance providers, but generally, the following individuals can buy a critical illness insurance plan:

Age Criteria

Most insurance providers offer critical illness plans to individuals within a specific age range, often between 18 and 65 years old. However, the age limits can vary, so checking with the insurance company is essential.

No Pre-existing Conditions

While some critical illness plans may cover pre-existing conditions after a waiting period, individuals without significant pre-existing medical conditions may have an easier time obtaining coverage.

Financial Stability

Applicants may need to demonstrate financial stability to afford the premiums. This is important as critical illness insurance is a long-term commitment, and individuals need to be able to pay the premiums over the policy term.

Consent to Medical Examination

Some insurance providers may require applicants to undergo a medical examination as part of the underwriting process. This helps assess the individual’s health status and determines the risk for the insurer.

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.

Before purchasing a critical illness insurance plan, it is advisable to carefully review the eligibility criteria of the specific policy and consult with the insurance provider or a financial advisor to ensure that the coverage aligns with your needs and circumstances.

Key Takeaways

  • Critical illness insurance typically covers a range of illnesses such as cancer, liver disease, kidney failure, stroke, multiple sclerosis, and heart attack.
  • Standard life and health insurance plans are not sufficient to cover the financial impact of a critical illness.
  • One must consider sum assured, exclusions, and age limit, before deciding to buy a critical plan.
  • Critical illness insurance should offer comprehensive financial protection, covering major illnesses, treatment, associated costs, and lost income during recovery periods.

- A Consumer Education Initiative series by Kotak Life

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

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