What you need to know about critical illness plan?

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Critical illness plan

The advent of technology and advancement has exposed us to a plethora of lifestyle diseases. In fact, the situation is so dire that one out of every four individuals is at risk of death from lifestyle-related diseases before 70 years of age.

Making modifications to diet and lifestyle, following proper dieting and workout regime can help one stay fit and prevent such diseases. Yet, often these precautions aren’t sufficient alone. Hereditary factors along with increasing age still find a way to creep in. Furthermore, in contrast to minor illnesses, these conditions become a huge burden on the pockets as the treatment costs add up to numerous lakhs.

As the awareness about health is increasing, so is the awareness about financial options related to it. Now, that more and more people are buying health insurance, the medical expenses are also increasing. It may not only be sufficient to buy a health insurance. You might need a second financial option through a critical illness plan. It’s best to purchase a critical illness plan when you’re 40, though buying early is profitable as well because health risks and premiums are both minimal. Considering how the people are suffering from lifestyle diseases at a younger age than before, the need to get a CI plan has elevated even for the younger age group.

How does Critical Illness plan work?

If you think that it must work in a manner similar to a regular health insurance, you’re wrong. CI plan differs from a regular health plan that it is supposed to pay a lump sum amount, i.e. the sum assured, to the insured person on acquiring a critical illness covered under the scheme (like stroke, heart attack or cancer). Unlike Mediclaim policy the amount is independent of hospital expenses and the consumer can use it for the treatment, expenses during recovery or any other expenditure.

Thus, critical illness plans pay you a fixed amount. Moreover, you may buy several CI plans and each of them will pay the full amount once eligible. On the other hand, a Mediclaim policy will only pay or reimburse the incurred hospital expenses.

What is covered under Critical illness plan?

The covered illnesses may differ from one insurance company to another, and even the amount of critical conditions covered may vary from anywhere between 8-20 or even more. A few common health conditions include cancer, heart attack, kidney failure, stroke, coronary artery bypass surgery, aorta surgery, organ transplant, heart valve replacement and paralysis.

How much cover do you need?

Well, it depends on a lot of factors. Normally the treatment of any critical illness reaches up to several lakhs and arranging such funds may seem like a big burden. Borrowing from people, taking loans from banks or ending existing investments for money further elevates the financial burden. Furthermore, such illnesses also diminish the earning potential of the person. This is where CI plan comes into play. Depending on factors like familial history of the diseases, medical expenses, age and type of job you must decide your assured sum for the CI plan. Typically, the cover should be a minimum of Rs 15 lacs.

What is the waiting period around a Critical illness plan?

Usually any insurance is associated with a waiting period, CI plan is no exception. You must understand that there are two types of waiting period related to CI plans. One is the period between purchase of the plan and diagnosing the disease, while second period is the time between diagnosing the disease and death. Typical, waiting period for the former is 90 days and for latter is 30 days. If one is diagnosed from a covered disease within 90 days from buying the critical illness plan or dies within 30 days from diagnosis of the disease, the policy cover will be forfeited.

What are the disadvantages of a CI plan?

It’s important to read through the Terms and conditions of the plan before purchasing. Sometimes the company might include certain clauses like the diagnosis would need to be established from a particular doctor or a particular test is required to affirm the diagnosis. Before settling the claims all such requirements are needed to be completed.

Also, CI plan doesn’t pay for hospitalization costs. Thus, it’s always beneficial to have a Mediclaim policy as well to cover the medical bills.

Conclusion

It’s always best to go for a Mediclaim policy where you can also purchase a critical illness plan as an add-on. If you already have a health insurance plan and it doesn’t provide the add-on, you can either migrate your policy to another provider or buy a critical illness plan separately.

Since critical illnesses are chronic, slowly progressing and, also, impact the earning capacity of the affected individual, it’s an essential to buy a critical illness plan for yourself and your family.

Also read: Doctors or Criminals: In the Modern Era how long will the Lifesavers be treated as lifetakers? 

About Aegon Life:

A joint venture between Aegon – world’s leading financial services and Bennett, Coleman & Company – India’s leading media house, Aegon Life Insurance launched its pan-India operations in July 2008. Armed with a vision to be the most recommended new age life insurance company, Aegon Life adopts the power of global expertise by leveraging digital platforms to bring transparent solutions, and to prioritize customer needs. Our financial planning and investment solutions include term life insurance plans, pension plans, unit-linked insurance plans (ULIPs), health insurance plans, child education plans, and more.