Term Insurance with Critical Illness

• 20th Sep 2021
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Critical Illness Insurance Plans provide coverage against some life-threatening diseases which require frequent visits to the hospital with considerable cost. This example will help us gain clarity on this point - Akshay is a senior Tech-specialist in his firm. During a routine check-up, he is diagnosed with arrhythmia, and since this is a critical condition, his doctor advises him to get a pacemaker implant. As a result, he receives a bill of Rs. 10 lakhs for the same. However, his health insurance policy covers only Rs. 5 lakhs. As a result, he has to pay the remaining money from his savings.​

Our Learning from this

Medical emergencies can show up when you least expect them. Given that critical illnesses are unpredictable, it is imperative that we have a critical illness policy in place to handle such situations. Not only you, but your family too struggles with the treatment costs, unending stress, and diving into savings for funding the best treatment possible. Having critical illness insurance can really help reduce the impact of these events so that everyone can focus on the treatment rather than worrying about the hospital bills.

Critical Illness Policies: A Brief Intro

Critical illness policies are covers that are specially designed for protection, keeping life-threatening illnesses and diseases in mind. Such illnesses encompass long term treatments, multiple hospital visits, consultation fees, prescription expenses, and so on. They can add immense financial burden on the person who is going through such a situation. However, a critical illness policy helps by paying the bills in lump sum for all the above-mentioned expenses. Another point to note here is that the critical illness lump sum comes in addition to insurance you may have.

Those Who Can Buy it

Critical illness insurances can be availed by anybody, but here are a few categories of people who should go for it -

• People with Illness history
  Many people come with hereditary illnesses that are bound to flare up at some point in their lives. Since they are already prone to an illness, getting a critical illness cover should have top priority.
• Earning Members
  If you are the earning member of your family wherein several members are dependent on you, getting critical illness insurance becomes a must. This ensures your family’s financial safety in case of an eventuality.
• Aged 40+
  Post this age, people are generally at a higher risk of developing chronic illnesses, and so, buying a critical illness policy is advisable.

Requirements for Eligibility

While a person must be at least 18 years old to be able to get a critical illness policy. However, it also depends on the sum assured amount. For example -

- To get a sum assured of 5 lakhs, you must be 50 years old.

- To get a sum assured of 8 lakhs, you must be 60 years old.

Additionally, there is a maximum age bar (generally 45 years), post which you need to get specific medical tests done to avail this policy.

Critical illnesses covered by Term Insurance

Usually, banks or insurance companies have their categories of critical illnesses with their respective terms and conditions, so it is quite common to find differences across these plans. However, here is a list of illnesses that are generally covered -

• Alzheimer’s Disease
• Angioplasty
• Apallic Syndrome
• Aplastic Anaemia
• Brain Surgery
• Cancer
• Coma
• Deafness
• Blindness
• Major Burns
• Encephalitis
• Heart Surgery
• Parkinson’s Disease

Benefits of Critical Illness Plans

There are several advantages of adding a critical illness rider. A few are mentioned below -

• It pays a lump sum coverage amount
• There are tax benefits as per section 80D of the IT Act.
• It is applicable within the country and outside the country (T&Cs applied)

Critical Illness Policies are generally added as rider benefits to a pre-existing Health Insurance that you might have. People generally go for Term Insurance with critical illness benefits, which provides them with a large additional coverage. If you want to protect your health and ensure your family’s safety, choose the rider with maximum benefits today!

- A Consumer Education Initiative series by Kotak Life