Critical illness cover: Do you need it?


Critical illness can attack any of us at any point in time so it is wise to be prepared to face such unforeseen circumstances

By 
Subrahmanyam B

The Indian entrepreneurial ecosystem has been flourishing over the last decade with a steady increase in the inflow of venture capital into new business models. 

The lure of being an entrepreneur leads many young individuals towards an independent journey. Being one’s own master becomes more attractive than the security provided by the monthly pay cheque, especially for the younger crowd. However, a lot of planning is required before venturing out on your own, not just from the business perspective but also on the personal front. This decision has a bearing on both you and your family. Your family’s goals, such as your children’s education and their marriage, should not become captive to how your business fares. Being your own boss comes with a host of uncertainties like unregulated earnings, lack of proper savings and absence of a corporate health insurance. A sudden incidence of a disease might corrode your savings. A life-threatening ailment should not hinder your future business plans and growth.

Critical illness can affect the youth as well. It often strikes in an unexpected manner. Change in lifestyle habits has resulted in higher occurrences of diabetes, hypertension obesity etc., among people in the age group of 30 years and 40 years. It means that irrespective of the age group, it is recommended to be covered by critical illness cover.

Many a times, a standard health insurance does not cover and protect your family against unforeseen health issues. Your health plan may have a limit and the doctor’s fees and full cost of treatment may not be covered thus. Or, there may be a cap on specific expenses such as on medicines, intensive care unit or prosthetics and your bill is more than what the insurer will pay. In such cases, you'll have no option but to pay from your pocket. 

Acute illness can also mean loss of income, disability and change in lifestyle. The financial burden could be far more than what a general health plan would cover. Buying a critical illness plan is the best way to overcome these limitations.

Critical illness covers are like fixed benefit plans. The insured person gets the full sum insured irrespective of what the treatment expenses are. However, details vary from plan to plan. It is imperative to evaluate and compare a few plans and decide which suits you the best.

1. The Cover

One must decide how much cover is required and what exactly is the company charging you for. One must know the benefits offered, as it will be easier to decide how much protection one needs. Factors like recurring costs, treatment costs, and future financial liabilities in the event of income loss must be looked at, as well as the age-benefit factor must be evaluated before deciding on the cover.

2. Kind of Policy

A critical illness plan can be bought as a standalone policy. Also, a critical illness rider can be clubbed with life or health insurance plans. The policy terms and conditions under both the options would be almost the same. However, a standalone policy is more flexible in choosing the sum insured and larger covers compared to the riders.

3. Illnesses covered

One must evaluate the list of critical illnesses covered. There are insurers in the market today that offer coverage on as many as 20 illnesses. 

4. Adequate sum insured

Always consider the average cost of treating major illnesses while evaluating the cover size. 

Buying a health insurance policy is just not about getting a waiver in your annual tax payment. Analyse the need of the hour and gauge the situation that life sometimes has in store for you, especially when you are on your own and the comforting aspects of regular income and company-provided health insurance are missing. Critical illness can attack any of us at any point in time so it is wise to be prepared to face such unforeseen circumstances.  

The writer is the Senior Vice President-Health and Commercial Lines, Bharti AXA General Insurance. 

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