DO YOU HAVE A CRITICAL ILLNESS COVER?

GET ONE BECAUSE A BASIC HEALTH POLICY IS NOT ENOUGH

People with a health insurance policy often think they are covered for all healthrelated exigencies. Not true. If diagnosed with a critical illness, they’d find that their health insurance policy covers only hospitalisation expenses. With cancers, strokes, liver and kidney diseases on the rise, it is important to know the difference between a basic mediclaim policy and a critical illness plan and why it is necessary to have both in your insurance portfolio. WHAT IS CRITICAL ILLNESS PLAN? Unlike a standard health policy that pays for hospitalisation expenses, a critical illness plan pays a fixed amount of money (sum assured) if you are diagnosed with a lifethreatening illness. Kicking into action soon after the diagnosis, the lump sum can help meet expenses incurred on diagnostic tests and treatment. The policy lapses after the lump sum has been paid.

WHAT DOES IT COVER?

Till recently, there was no standard definition of critical illness and insurers had their own criteria. Then, the Insurance Regulatory and Development Authority (IRDA) standardised 11 critical illness terms. Now such plans cover diseases like cancer, heart attack, open heart valve repair or replacement, kidney failure requiring regular dialysis, major organ or bone marrow transplant, among others. Standard illnesses covered in a critical illness plan vary from insurer to insurer; typically15 diseases are covered.

MEDICLAIM OR A CRITICAL ILLNESS POLICY?

Critical illness should be a second layer of protection in your insurance portfolio, buy a mediclaim policy first that covers your hospitalisation expenses. Ideally you should buy a policy when you are in your 40s. Many insurers have recently launched standalone cancer-specific plans. Two new reports by the Indian Council of Medical Research estimate that India will see 1.5 million new cases of cancer in 2016, a number seen going up to 1.7 million new cases by 2020.

WHO SHOULD YOU BUY IT FROM?

General insurers mostly sell critical illness plans as standalone products whereas life insurers generally offer it as a rider to a life insurance policy. Also, unlike life insurers, general insurers give lifetime renewability. Individual plans also offer more flexibility in terms of sum assured and coverage whereas a rider plan depends mostly on the base term policy.

Before choosing a policy, however, compare rates and the coverage different plans offer.