Modern living puts you at a great risk of falling prey to critical lifestyle diseases. Studies show that one out of every four individuals suffers from a non-communicable illness, such as cancer or cardiovascular issues. Regular exercise and healthy eating habits are beneficial in reducing the risk of such ailments. Nonetheless, age and hereditary reasons may result in you suffering from lifestyle-related disorders.
Treating such critical illnesses is expensive and may result in financial difficulties. You may argue that you already have health insurance coverage and the treatment costs are covered. However, this cover may be insufficient and availing critical illness insurance is recommended.
Procuring critical illness coverage when you are around 40 years is advisable. If you avail of the insurance at an early age, you will have to pay a lower premium. Moreover, it ensures you complete the waiting period, if any, before the risk of lifestyle diseases increases.
Working of critical illness plans
The critical illness plan is different from medi-claim policies. This type of health insurance for critical illness pays a lump sum amount up to the sum insured in case you are diagnosed with an ailment that is covered under the plan. The lump sum payout may be used to pay for treatment expenses, recovery costs, or repay debt.
A critical illness cover is a defined benefit plan because the payout is fixed and predefined. On the other hand, mediclaim is an indemnity policy that reimburses the expenses incurred towards treating an illness.
Before you buy critical illness insurance, here are five things you must consider.
- Survival period
In most instances, the insurance companies include a survival period of 30 days. However, based on the type of illness, the survival period may be more than 30 days. This means that you must survive for at least 30 days from the date of diagnosis to claim the benefits under the critical illness cover. The survival period is also different from the waiting period imposed by insurers when you purchase a health insurance plan.
- Covered illnesses
This is an important factor that you must consider before making a buying decision. Insurance companies cover between eight and 20 critical illnesses. Therefore, it is crucial that you research the different options to make an informed decision.
- Built-in cover
The primary objective of health insurance for critical illness is to provide freedom from financial distress in case you are diagnosed with an ailment. However, several insurers offer additional built-in covers such as hospital cash, personal accident coverage, and complimentary health check-ups.
- Pre-existing diseases
Most insurance companies cover pre-existing conditions at the end of the waiting period, which may be up to four years. There are some insurers that do not cover pre-existing conditions at all. Therefore, you need to carefully analyze and assess to check for coverage for pre-existing conditions.
- Free look period
Insurance companies generally offer 15-days free look period. During this period, you may evaluate and reconsider your decision and cancel or modify the policy, if required.
Because critical illness insurance is a defined benefit plan, it does not reimburse hospitalization expenses. Therefore, having a regular health insurance policy is also recommended. You may buy critical illness as a standalone plan or as a rider with your existing health plan.
Several companies offer different types of critical illness plans. You must research and evaluate the various options to make an informed decision. It is crucial that you read the terms and conditions and understand the inclusions and exclusions to avoid any issues in the future.
Critical illnesses generally progress slowly and last for longer periods. Therefore, financially protect yourself and your loved ones with a critical illness plan.