Critial illness: what a disaster?

Ursula K. LeGuin quotes “The only thing that makes life possible is permanent, intolerable uncertainty; not knowing what comes next.”

I agree with Ursula K. LeGuin for critical illness could strike anyone at anytime and in any place with the modern trend of rise in lifestyle diseases that call for prompt and costly medical care. The necessity of critical insurance or health insurance with critical illness riders was strengthened with my friend Mr. Karthik being diagnosed with multiple blocks in his heart that involved a treatment of 3lac. Then one more friend told us all about the necessity of critical illness insurance and health insurance with critical illness.

Understanding all about critical insurance and health insurance with critical insurance riders would tell us that most such health insurance policies would cover 12 critical illness besides others. They could include heart attack, coronary artery bypass surgery (CABG), cancer, kidney failure, stroke, coma, liver failure, primary pulmonary arterial hypertension, multiple sclerosis, major organ transplant, aorta graft surgery and total blindness.

These diseases and surgical procedures could be wanted by anyone, at any time and anywhere and hence cannot be neglected at all. Health insurance companies generally undertake to pay a lump sum for the treatment of these diseases irrespective of the amount spent. Some companies may include such coverage on payment of additional premium every year. This could vary from company to company and also between companies dealing in life and general insurance. 

Features of Critical Illness Insurance

Ø  It is quite possible to take up critical insurance policies or health insurance with critical insurance riders. When a critical insurance policy is taken the entire amount of the sum assured is paid on treatment of the critical insurance irrespective of the amount actually spent. Such a policy is a benefit plan.

Ø  The benefit payment under the Policy will generally be paid to you on survival for more than 30 days on post diagnosis of the critical illness.

Ø  However critical illness insurance will not cover ordinary hospitalization and medical expenses. While health insurance policies with critical illness riders would offer extra protection against critical illnesses with payment of additional premium. They would also pay the lump sum on the treatment of the critical illness.

Ø  However one needs to understand that critical illness insurance does not have any maturity value and just offer cover in case of critical illness. Such amounts may lapse on their not occurring. Life insurance policies offering critical insurance riders have a maturity value but no maturity value is allotted for riders. Riders merely cover the risk of critical insurance. However this need not deter one from taking up critical illness insurance, as it is well worth to cover risk of high expenses with critical illness.

Ø  Having a look into the premium on these policies would give us information that the amount of premium on critical illness insurance and riders for critical illness would vary depending on the age of the insured and the illnesses that are covered.

Ø  Critical illness insurance could have exclusive coverage for all critical diseases or for only some, the terms and conditions varying from company to company. A check would prove useful before taking up a critical illness insurance or life insurance with critical illness riders.

Ø  Tax benefits under Sec 80D or Sec 80C of the Income Tax Act are available.  

Get critical insurance today

“Caution is a most valuable asset in fishing, especially if you are the fish.”

I am sure you would not prefer to be the fish that is not cautious, for life is so sweet and short. Mr. Karthik and his family are now out to advice families like them, for they believe their experience could educate others too.

The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.