Page 51 - Insurance Times November 2023

Factors one should consider when buying critical illness

insurance cover

W ith new diseases coming to the fore, income of Rs. 5 lakh can go for an insurance cover of around

Rs. 20 lakh. It can help one sustain financially for a few years
discovery of new line of treatments and rising
medical costs, the need of having a critical
higher cover sounds better, it can get really expensive. Also,
illness insurance cover is growing day by day. in case of loss of job due to critical illness. While buying a
the insurer might restrict you from buying a very high critical
In recent times, term and health insurance have gained a
lot of popularity. However, the same is not the case with illness cover depending upon its underwriting norms and
critical illness insurance. There is lack of awareness about your medical condition.
the product and how it works. People also think that their Common critical illness products in the market cover around
regular health insurance is enough to take care of all types 15 to 20 illnesses and so is not comprehensive. These plans
of illnesses. The cost of critical illness insurance policies is cover serious illnesses like cancer and renal failure. But they
also a major deterrent. do not cover illnesses such as Alzheimer's or Parkinson's
disease. But some insurers have now launched critical illness
Critical illness insurance can prove to be life saver for those
products that cover 64 or even up to 99 illnesses. These are
who are diagnosed with a serious and long-term illness which
obviously more comprehensive policies and provide
require expensive treatment. A critical illness insurance policy
provides a huge lump sum benefit on the diagnosis of any coverage against critical illnesses. But such plans can be
critical illness covered under the policy. expensive.
But buying critical illness insurance can also be tricky. Life All critical illness insurance products have layered benefits
insurance companies offer critical illness insurance as riders where the claim amount paid by the insurer depends on the
along with term insurance or endowment plans. General severity of the disease. A certain condition might make a
insurance or health insurance companies offer critical illness policyholder eligible for just 25% or 50% of the initial cover
insurance either as a rider along with regular health amount. A certain more severe condition of the same illness
insurance plans or as stand-alone products. might pay 100% of the cover amount. This will entirely
depend on the diagnosis of the illness where the severity
Buying critical illness cover as a rider comes with many would be mentioned.
limitations. The cover amount and premium for a critical
illness rider should not exceed the cover amount and So, it becomes important to read the product brochure and
premium of the base policy, respectively. There is restriction other sales material in detail to know what it offers. This
on the term of critical illness rider depending on the term will ensure that subscribers know exactly what they are
of a base policy. On the other hand, buying a stand alone going to buy. Some sales material might not contain all the
critical illness cover from a health or general insurance details and list of what is covered because of the complex
company comes with no such restriction. These plans are nature and long list of illnesses covered under the plan. But
more flexible in terms of cover amount and duration of the the policy document contains the entire list of coverages
policy. and exclusions in detail.

Deciding on the cover amount is important. While there is One should read the policy document once to ensure that
no rule of thumb here, one can link it with the annual income he or she knows what the product offers. If someone is not
of a policyholder. A cover amount equal to four to five years happy with any of the terms and conditions, they can return
of annual income looks good. So, a person having an annual the policy within the free look period. (Source: Mint)

46 November 2023 The Insurance Times