The table below will shed some light on the need for every individual to have a Critical Illness plan, especially given the prevalence of such a lifestyle for the average Indian:
|Critical Illness||Data Points (India)||Some of the Causes
|Heart Disease ||Around 200 deaths/lac of population|
Estimated that by 2030, 1 out of every 3 patients will be from India
Estimated to add around 1.6 million patients every year
In India 4 persons in the age group of 30-60 succumb every minute
Smoking / Excessive Alcohol
Cholesterol / Hypertension / Diabetes
Genetics / Family History
|Cancer ||Death from some type of cancer every 3 minutes|
Almost 70% of cancer patients in India between 30-70 years
New Cases account of around 1.2 million every year
Expensive, uncontrollable treatment expenses
Ultra Violet (UV) Ray exposure consistently
Genetics / Family History
|Alzheimer’s Disease ||Atleast 5% of the population suffer some form of this disease upto 65% of age|
Early detection age has come down to 45-50 years from above 60 a couple of decades ago
India will be home to around 14.3 million patients in the next 25-30 years
Expensive treatment which is ongoing
|Kidney Ailments (Chronic Kidney Disease – CKD) ||150-230 persons per million suffering from End Stage Kidney Disease (ESKD)|
Health Ministry estimates atleast 800 persons/million have some health issues related to the Kidney
Upto 275,000 persons require Renal Replacement Therapy (RRT) every year
Dialysis Expenses range between ₹20,000 – 30,000 per month
Lack of fluid intake
Too much consumption of salt leading to Hypertension
|Stroke ||Prevalence of Strokes in India range between 119-145 per lac of population|
Prevalence higher in Rural areas than Urban areas
1.8 million (18 lacs) people suffer a stroke in India every year
Leading cause of Disability apart from being one of the highest causes of death
|Salt Intake/Hypertension / Blood Pressure
Some of the most covered Critical Illnesses across the insurance companies in India include:
This list is not an exhaustive list of all covered Critical Illnesses by all insurers. Insurance companies cover different critical illnesses under different plans within their product offerings. Different insurance companies also have a different set of Critical Illnesses they cover…please go through their covered illnesses before deciding on the optimum plan for your requirement.
There are quite a few important features of Critical Illness insurance plans that one must note: Critical Illnesses (CI) Defined – The most important feature is that under the CI Plan Coverage, there are defined number of illnesses only covered. All insurance companies provide a list of the illnesses/ailments that are covered so that the applicant will be aware of what’s covered. Kindly note that any ailment/illness other than those named/listed by the insurance company will not be covered. Some important ones that all insurance companies cover include First Heart attack, Cancer, Kidney Failure, Stroke etc.
Survival Period – Every CI policy comes with a survival period benefit, this means that post detection of the critical illness, the insured will need to survive this period in order to ensure the claim becomes payable. This is normally 30 days. Hence for example, if one has suffered a Stroke, he/she will need to survive 30 days and then the claim is payable. This is important to note, so incase the insured unfortunately passes away during the survival period, then there is no claim paid by the insurer.
Single Lump-sum Payment – The insurer pays the sum insured as a single lump sum payment for the treatment of covered illnesses, subject to crossing the survival period. What is important is that since this is a fixed benefit plan, the sum insured is p aid in full, irrespective of the expense incurred. For example, if the Sum Insured of the policy is ₹5 lacs and the treatment expenses are only ₹3 lacs, the entire SI of ₹5 lacs will be paid to the insured.
Simple Claim Processing – The documentation at the time of a claim under the plan is very minimal given that the policy covers defined illnesses/conditions for which supporting documentation needs to be provided for the claim to be settled The claim can be easily settled based on the diagnosis report(s) submitted by the insure
Income Tax Benefits under a CI Insurance Policy – The policyholder can avail tax deductions under the Income Tax Act, 1961. Tax exemption can be claimed upto ₹15,000 under Section 80D of the Income Tax Act, 1961. Senior citizens can avail tax benefit up to ₹20,000 under the same section.
Loss of Job / Income – Following a critical illness, it is most likely that the insured may need to stay away from work for a period of time or may even have to give up his/her job based on their health condition. Hence the claim is used as an income replacement for the insured.
Policy Termination on Claim Payment – Unlike a regular Indemnity based health insurance plan, in a CI policy, once the claim is settled on detection of a covered critical illness and crossing the survival period, the CI policy will automatically cease to be in force.
There are quite a few factors to keep in mind while investing in a Critical Illness Plan:
|Factor to be kept in mind||Remarks|
|Should you buy a Standalone Critical Illness Insurance Policy or Critical Illness Insurance Rider?||A standalone CI has a higher premium when compared to a rider, since it offers more comprehensive coverage when compared with the latter.|
|Number of Critical Illnesses Covered (Range from 6 – 40)||The insurance company lists the exact illnesses covered under their plan. Important to note that no other illnesses/ailments will be covered|
|Sum Insured||There are CI plans which offer coverage for even upto ₹100 lacs, one must opt for an optimum sum insured depending on their age, family history, pre existing medical conditions etc|
|Age of Insured||This is an important factor which determines the coverage / premium for the CI plan.|
|Survival Period / Waiting Period||All CI plans come with a survival period, normally 30 days, post which claims are settled. There is also a mandatory waiting period of 30 days from the start of the policy during which no claims are payable at all.|
|Maximum Entry Age||Each plan has a maximum entry age after which the applicant will not be able to apply for a CI policy, this is normally 60-65 years.|
These type of plans are also known as Fixed Benefit plans (Critical Illness) and Indemnity Based plans (Health Insurance) and the table below highlights the important differences between the two plan from an individual’s perspective. It is recommended that since both these plans are complimentary to each other, every individual should ideally have both plans for their protection.
|Critical Illness Plans||Health Insurance Plans|
|Pays a lumpsum upto Sum Insured on the occurrence of the covered event. Even if the actual expenses are less than the Sum Insured, the amount is settled in full.||Reimbursement/cashless settlement only upto the actual expenses incurred irrespective of the Sum Insured|
|These plans cover only a limited / fixed set of benefits which are defined in the plan||Most indemnity based health insurance plans offer wide ranging coverage for sickness to the insured|
|Policy / Plan expires in the event of a claim and the Sum Insured being settled to the insured||Policy continues even after a claim is paid, coverage will remain upto the balance remaining Sum Insured (or back to 100% SI with Restore Benefit plans)|
|Fixed Benefit plans normally do not have a co-pay or deductible. Full Sum Insured settled to the insured||Indemnity plans have a co-pay / deductible based on the plan chosen by the insured|
|Some Fixed Benefit Plan like Critical Illness have Survival periods (normally 30 days) after which expenses / SI becomes payable||No Survival Period. Expenses from Day 1 of hospitalisation are payable under this plan.|
|Premium for these plans are relatively higher||Premiums based on coverage/SI chosen, but cheaper when compared to Fixed Benefit plans|
|Normally chosen for covering Critical or Life Threatening ailments||Purchased to cover more routine medical expenses following a sickness/accident|
|Who Should buy CI?|
Ideally everyone needs this policy but let’s look at a few customer profiles:
|Why Should you buy CI?||Given today’s lifestyle led by most Indians and given that we are unfortunately leaders in the world in terms of diabetes, cardiac issues, hypertension, increasing stress levels, pollution, having a CI policy to protect individuals financially is important|
|When Should you buy CI?||At the earliest given opportunity, but most definitely if one is in the age group of 35-65 years.|
|What CI policy Should you buy?|
Do a market survey of the products and opt for a plan with the following:
|Where should I buy CI from?||If one would like to review and compare all the available CI plans in the market, visit a comparison website that provides information specific to Critical Illness plans.|
|How should I buy CI?|
One can purchase the same online following a simple three step process:
The Insured will need to submit the below mentioned documents for the processing of Critical Illness Claim:
On receipt of claim documents from Insured, Insurer shall evaluate the admissibility of claim as per Policy terms and conditions. Upon satisfactory completion of assessment of the claim, the Insurer will make the payment of benefit as per the contract. In case if the claim is repudiated Insurer will inform the Insured about the same in writing with reason for repudiation. Lack of documents or medical certificates confirming the diagnosis of illness or undergoing of medical/surgical procedure will result in forfeiture of the claim.
In the event of any doubt regarding the appropriateness or correctness of the diagnosis, the Insurer shall have the right to call for an examination of the Insured in concurrence with Insured or his legal representative on the evidence used in arriving at such diagnosis, by a Medical Specialist appointed by the Insurer and the opinion of such Specialist as to such diagnosis shall be considered binding on both the Insured and the Insurer.
In the event of death of the Insured post the survival period, the immediate family member/relative of the Insured and claiming on Insured’s behalf must inform Insurer in writing immediately and send Insurer a copy of all the required documents to prove the cause of death within 14 days. Insurer upon acceptance of the admission of claim under the Policy shall make payment to the Insured or Nominee/legal heirs of the Insured, in case of the death of the Insured post the survival period.
Some of the major exclusions under the CI policy are as follows. However go through the entire set of exclusions as available in the policy wordings received from the insurance company along with the policy kit.