Health insurance: Key things to know before buying critical illness cover

Critical illnesses have lately started affecting people in their most productive years of life, resulting in appalling social and financial consequences. India’s rising healthcare inflation rate is another great matter of concern. So, at any stage of life, one cannot afford to drain a major part of their savings on treating a particular disease. This is why it is always suggested to stay adequately protected by buying the right insurance product.

Along with a comprehensive insurance plan, it is equally important to be covered under a critical illness (CI) insurance plan. This adds extra cover to the regular mediclaim policy or insurance product. These plans not only give the insured a lump sum amount but also provide the much-needed financial backup.

Some of the illnesses covered under CI are cancer up to a specified stage, heart attack (first time), open-heart coronary artery bypass grafting, coma of specified severity, and kidney failure that requires regular dialysis, among others.

Given the rise of critical illnesses and the high cost of their medical treatment, customers need to opt for the critical illness (CI) plan.

Also, the present health plays a vital role here. A person, who smokes and lives a hectic work life, is more prone to vulnerable health problems in the future. It’s, therefore, good to choose the best critical insurance policy early so that the policyholder doesn’t have to encounter too many hassles.

A critical illness insurance plan works quite differently from a normal health insurance plan while providing the customer with maximum financial protection, said Venkatesh Naidu, CEO of Bajaj Capital Insurance Broking Ltd, while talking to CNBC-TV18.com.

"Upon diagnosis of a critical illness, the insurer pays the policyholder the entire sum insured as a lump sum regardless of the hospitalisation bill. The lump sum amount received by the policyholder can be used to pay hospital bills, home loan payments, investment premiums, day-to-day expenses, and other expenses that may arise from lost income while the policyholder cannot work during the treatment and recovery phase," Naidu said.

According to Naidu, the waiting period for a critical illness plan is typically 90 days from the date the policy is issued. The insurance company does not approve claims made within 90 days of the policy's issuance.

Furthermore, most insurers require that the policyholder survives for at least 30 days after being diagnosed with a critical illness to file a claim.