InvestorQ : What is the critical illness insurance plan? Can anyone please explain?
Anushri Vasa made post

What is the critical illness insurance plan? Can anyone please explain?

Swapnil Sarang answered.
3 years ago
A critical illness insurance plan is a type of plan insurance companies are offering customers in India to cover their critical illnesses such as cancer, paralysis, heart attack, etc. A critical illness plan is extremely important for any individual as the number of fatal illnesses are increasing every passing day.
Critical illness can be explained as a serious health condition that affects the lifestyle of a person and is often fatal. As if the bodily pain and emotional trauma that a person goes through isn’t enough, one also has to deal with heavy financial outflow. This is why critical illness insurance is important.
Under this kind of insurance, a policyholder will pay a premium and purchases a policy from an insurance provider. If, during the policy’s term, the policyholder is diagnosed with any of the critical illnesses mentioned in the policy document, a sum assured amount and the related benefits will be paid. A lot of insurers also consider the fact that a policyholder with a critical illness might not be able to work and will resultantly, lose his/her employment. Thus, they also offer daily allowance benefit.
Do note, however, that the critical illness needs to be defined as such in the policy document for you to claim any benefit.
A standard individual health insurance, also known as indemnity insurance plan wherein you are allowed to visit almost any doctor or hospital you like, may not be sufficient to cover a critical illness treatment.
You can add the critical illness rider to your base policy to give you enhanced financial protection. Most insurers cover 6-15 critical illnesses.
Thus, you can choose a critical illness rider with:
- High number of illnesses covered
- Low waiting period
- A premium amount that you can afford
- Maximum renewability age of 60-65 years
- Sum insured of 4-5 times the annual income
Some of the critical illnesses covered under this rider are: cancers of specified severities, heart attacks, aplastic anemia, muscular dystrophy, permanent paralysis of limbs, and kidney failure requiring regular dialysis. You can claim critical illness sum assured once you are diagnosed with any of the critical illnesses specified in the policy document.