All You Want to Know Before You Buy a Critical Care Plan

Introduction

A Mediclaim Policy only covers the cost of treating an illness - it does not compensate you in case your illness makes you unable to earn. For a set of about a dozen debilitating diseases (such as stroke, cancer, blindness, etc) you get a lump-sum payment on diagnosis, through Critical Illness cover. This payment has nothing to do with the costs you incur in treatment. Indeed, you can get this in addition to the regular Mediclaim that reimburses you the cost of treatment.

Critical Illness Policy addresses the point made above - about getting some compensation for loss of income. Most Critical Illness Policies today have an upper limit of about Rs 30 lakh of payout. We suggest that taking the maximum possible limit is a good policy to have, in addition to the 'compulsory' Mediclaim.

Features of Critical Care plan

Like the name itself carries, only major illnesses are covered. Different companies may consider different diseases as critical but a critical illness policy commonly covers these illnesses or conditions: Cancer, Coronary Artery Bypass Surgery, First Heart Attack (Myocardial Infarction), Kidney Failure (End-stage Renal Failure), Major Organ Transplant, Stroke, Paralysis, Heart Valve Surgery, Surgery for a disease of the Aorta and Multiple Sclerosis. Another point to note is that even if you were diagnosed with one of the diseases in their list, unless their registered doctor confirms that it is critical you may not be paid the benefits.

Minimum entry age is 5 years but restricted to 20 years by some players while the maximum entry age is 55 years. However, most existing policies can be renewed till attaining 70 years of age. The age criterion for entry and renewal widely varies among various players.

Sum insured of Rs 1 lakh to Rs 50 lakh can be chosen. The premiums rise with age and sum insured. A critical cover policy is a benefit policy unlike a reimbursement policy which means if you are diagnosed with any of those major illnesses you are eligible to receive the entire sum insured irrespective of the actual medical expenses incurred and even if you are not hospitalized!

What is not covered in a Critical Care policy?

Critical Illness policies do not cover pre existing diseases and also critical illnesses that are contracted within 90 days of buying the policy. Similarly if death occurs within 30 days of being diagnosed the benefit is not payable. The company can deny benefits if any trace of HIV/AIDS is found or if the disease can be linked to pregnancy/childbirth or if the disease is resultant of pre existing mental or physical ailments. If treatment undergone is not scientifically recognized it will stand excluded. 

Similarly, as in all other insurance policies, if the disease is due to exposure to radioactivity or nuclear fuel/nuclear waste it will not be covered. If the disease is in any way linked to war, invasion, and terrorist activity it will remain excluded. Like we mentioned above even with the diseases on their list benefit will be provided only if it meets only conditions laid down by them. For instance with cancers if it is benign or if it is not malignant it might be excluded.  

Useful Riders

Several riders may be presented to you on a critical care insurance, not all of them will be useful. Permanent Total Disability is a useful one: 

This rider insures against permanent total disablement due to loss of limbs and sight in an accident. Compensation is paid if they're convinced that the insured is unable to gain employment in the future. However you can get better coverage for lesser premium if you buy this as a standalone policy and this is what you should be doing.

Do I Need Critical Care policy?

Your risk for contracting critical illnesses rises with age. If you wait too long the premiums could get expensive. You can buy a critical care plan once you reach around 38-40 years of age. 

A Critical Cover supplements your Mediclaim. It shouldn't be thought of as a substitute for it. If you don't own a Mediclaim policy, get one soon. Mediclaim takes care of expenses related to hospitalization. If you have a family history of certain major diseases ascertain if those diseases are covered by some provider and take cover under that policy.

When you make claim on your critical cover the policy expires. You would have to apply for a new one but you wouldn't be covered the next time for a disease you got benefits once. Critical illness policy should be bought separately and not as a rider with Life Insurance policy.

Finally remember to claim tax benefits under section 80 D for premium paid on your critical illness policy. You can claim up to Rs 15,000 and in case of senior citizens this can be up to Rs 20,000 a year. This is including premiums on your mediclaim policy.


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