Are you insured for cancer, stroke & more? Check this
Cancer treatment can wipe out your hard-earned savings that you had built up over years in just a few months if you or any of your family members is diagnosed with this deadly disease. Plus, there are plenty of such life diseases that also require costly treatments. Any critical illness diagnosis can be a big shock, even for the toughest among us, and it might get worse if you don’t have enough savings to support yourself and your family during tough times.
But there’s a way to ease that financial strain significantly by opting for a critical illness coverage insurance plan. In this discussion, we’ll cover what critical illness is, who should consider buying it and how much cover you actually need.
So, what exactly is critical illness in health insurance?
If you find yourself diagnosed with a serious or life threatening condition like cancer, a heart attack, kidney failure, or paralysis, the treatment costs are likely to be quite high. A critical illness insurance plan provides you with a lump-sum payment when you are diagnosed with a covered disease that meets certain severity criteria.
As explained by Siddharth Singhal, Business Head - Health Insurance, Policybazaar.com, “Critical illness insurance complements standard health insurance by covering the often-unmet costs associated with serious illnesses like cancer, heart attack, or stroke, which are usually exorbitant and long-term”.
“These illnesses require expensive treatments like multiple chemotherapy, organ transplant surgery that can be beyond the scope of standard health insurance coverage”, he added.
A critical illness plan provides valuable financial assistance, even if you already have an active health insurance policy that might not fully cover certain serious conditions.
This plan works as an extra layer of protection beyond your regular health insurance. With this cover, families can handle medical and financial stress more easily. This money can be used for treatment, recovery, and more. Besides, you can also use this payout as a substitute for your income that may be compromised due to serious illness.
Also read: Getting only 50% of surgery cost in your health insurance claim? Here’s why you need to check sub-limits clauses in your policy
Here’s the list of prominent critical illness diseases
Permanent Paralysis of Limbs Alzheimer’s Disease Muscular Dystrophy Parkinson’s Disease Poliomyelitis Deafness Note: The number of illnesses covered in a policy can vary from insurer to insurer, as some health plans even cover up to 100 critical illnesses.
There are several ways of getting good coverage against critical illnesses. One option is to buy a good comprehensive health insurance policy that includes high coverage for critical illnesses. Another option is to buy a stand-alone critical illness policy. You can also buy it as a rider or as an add-on with your life insurance or health insurance policy.
Standalone critical illness health insurance plan vs critical illness rider
There are many factors that lead to the differences between a standalone critical illness health insurance policy and critical illness rider, such as premium costs, coverage, payout amount, and more.
Sarita Joshi - Head of Life & Health Insurance, Probus says: “Both the options have their own place, the choice completely depends on an individual's budget or health risks. If you’re looking for basic protection at a lower cost, adding a critical illness rider to your existing term or health policy is a good start, it adds an additional layer of protection without the need to manage multiple policies.
She further explained, “However, such a rider generally has smaller payout amounts, limited coverage options or sometimes even fixed illnesses coverage. On the other hand, a standalone critical illness policy offers wider coverage, a larger payout, independent claim benefits etc. Such a policy is well-suited for someone with major illness or high health risks family history”.
There is one aspect where comprehensive riders may score above a critical illness rider. “A critical illness rider provides a lump-sum pay out upon the diagnosis, after which the rider is often terminated while some comprehensive riders may offer multiple pay-outs for different conditions,” says Siddharth Singhal, Business Head - Health Insurance, Policybazaar.com.
Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI), points out the factors that you should keep in mind if you are planning to go for a stand alone critical illness insurance policy as it offers
Also read: Now injury from sports and gym also covered in this new health insurance policy, check details
Is a comprehensive health insurance plan with critical illness cover better than the above two?
A comprehensive health insurance policy which includes critical illness cover provides you a wider protection in terms of coverage. “A comprehensive plan that combines standard health and critical illness benefits gives the best of both worlds. It ensures wider protection, fewer policy overlaps and ease of management” says Joshi.
“Although the premiums of such plans are slightly higher, they ensure you’re covered for both hospitalization and major illnesses without the need to juggle multiple policies and reduce the chance of under-insurance. For people who prefer simplicity and holistic coverage under one plan, a comprehensive health-cum-critical illness policy is often the most practical and beneficial option”, Joshi added.
However, Bharindwal points out that many critical illness riders do not pay you the sum insured as a lump sum amount but make payment through a reimbursement mechanism where payment is limited to expenses incurred. The illnesses that are covered in these plans are limited.
Is a critical illness rider with a life insurance policy a better option?
Critical illness plans are also offered with life insurance policy as a rider or add-on. Bharindwal lists out the merits and demerits of this option.
Abhishek Kumar, founder of Sahaj Money also explained, “The choice between a standalone or as a rider along with life insurance or health insurance plan would depend on the coverage requirement and budget. If one is looking for broader coverage with higher sum insured options and greater flexibility in customisation then a standalone critical illness policy is a better option. However, it comes with higher premiums”.
Also read: First-time health insurance buyer? 7 smart tips to choose the right policy and avoid costly regrets
So, how much critical illness cover do you need?
The amount one would need depends on the number of factors such as the cost of treatment, the person’s liabilities, monthly expenses and many others.
Arti Mulik, Chief Technical Officer, Universal Sompo General Insurance said: “In India, critical illnesses, like cancer, heart surgery, or organ transplants can easily range from ₹20–30 lakh just for treatment, with additional costs incurred for loss of income, rehabilitation, and treatment extending beyond hospital discharge. A straightforward approach to determining adequacy is to establish a goal of 3–5 times your annual income which allows you to deal with both medical and financial emergencies”.
While considering the amount of coverage, you must factor in where you live. “If you live in a metro city where treatment costs are higher, leaning toward the upper end, you may consider boosting your critical illness insurance cover. The goal is not just to survive a health crisis but to recover without financial stress,”he added.
Who should buy a critical illness cover?
Treating a critical illness can be long and quite expensive. For instance, the average cost of cancer treatment in India ranges from ₹5 lakh to ₹25 lakh. Besides, the treatment may not just include hospitalization but also various therapies like chemotherapy and radiotherapy.
In addition, you might have to leave your job during the treatment of your or your close family member, leading to a loss of income.
“Salaried individuals' income stops if they can’t work. Critical illness cover gives a lump-sum payout to manage expenses. Example: A 40-year-old IT professional suffers a stroke and cannot work for a year. Critical illness cover of ₹25 lakh helped pay EMIs and therapy,” says Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI).
If you have a family history of critical illness and poor lifestyle in terms of food habits and work pressure, then you might be susceptible to lifestyle diseases such as heart attack, stroke, obesity, hypertension, etc. “Individuals with a family history of critical illnesses often opt for the critical illness cover. Good insurance advisors help customers make the right choices through effective fact finding analysis,” Rahul Mathur, CEO of Roinet Insurance Broker Pvt Ltd said.
Another key point to consider for a critical illness cover is that if you are the breadwinner of your family, it helps make sure that your loved ones won’t face financial strain during a medical crisis.
Experts suggest that critical illness cover ensures financial stability during tough times especially when you or a family member is diagnosed with a serious illness.
But there’s a way to ease that financial strain significantly by opting for a critical illness coverage insurance plan. In this discussion, we’ll cover what critical illness is, who should consider buying it and how much cover you actually need.
So, what exactly is critical illness in health insurance?
If you find yourself diagnosed with a serious or life threatening condition like cancer, a heart attack, kidney failure, or paralysis, the treatment costs are likely to be quite high. A critical illness insurance plan provides you with a lump-sum payment when you are diagnosed with a covered disease that meets certain severity criteria.
As explained by Siddharth Singhal, Business Head - Health Insurance, Policybazaar.com, “Critical illness insurance complements standard health insurance by covering the often-unmet costs associated with serious illnesses like cancer, heart attack, or stroke, which are usually exorbitant and long-term”.
“These illnesses require expensive treatments like multiple chemotherapy, organ transplant surgery that can be beyond the scope of standard health insurance coverage”, he added.
A critical illness plan provides valuable financial assistance, even if you already have an active health insurance policy that might not fully cover certain serious conditions.
This plan works as an extra layer of protection beyond your regular health insurance. With this cover, families can handle medical and financial stress more easily. This money can be used for treatment, recovery, and more. Besides, you can also use this payout as a substitute for your income that may be compromised due to serious illness.
Also read: Getting only 50% of surgery cost in your health insurance claim? Here’s why you need to check sub-limits clauses in your policy
Here’s the list of prominent critical illness diseases
- Cancer of Specified Severity
- Angioplasty
- Heart Attack
- Heart Valve Surgery
- Surgery to Aorta
- Primary Pulmonary Hypertension
- Blindness
- Chronic Lung Disease
- Chronic Liver Disease
- Kidney Failure
- Major Organ / Bone Marrow Transplant
- Benign Brain Tumour
- Brain Surgery
- Coma
There are several ways of getting good coverage against critical illnesses. One option is to buy a good comprehensive health insurance policy that includes high coverage for critical illnesses. Another option is to buy a stand-alone critical illness policy. You can also buy it as a rider or as an add-on with your life insurance or health insurance policy.
Standalone critical illness health insurance plan vs critical illness rider
There are many factors that lead to the differences between a standalone critical illness health insurance policy and critical illness rider, such as premium costs, coverage, payout amount, and more.
Sarita Joshi - Head of Life & Health Insurance, Probus says: “Both the options have their own place, the choice completely depends on an individual's budget or health risks. If you’re looking for basic protection at a lower cost, adding a critical illness rider to your existing term or health policy is a good start, it adds an additional layer of protection without the need to manage multiple policies.
She further explained, “However, such a rider generally has smaller payout amounts, limited coverage options or sometimes even fixed illnesses coverage. On the other hand, a standalone critical illness policy offers wider coverage, a larger payout, independent claim benefits etc. Such a policy is well-suited for someone with major illness or high health risks family history”.
There is one aspect where comprehensive riders may score above a critical illness rider. “A critical illness rider provides a lump-sum pay out upon the diagnosis, after which the rider is often terminated while some comprehensive riders may offer multiple pay-outs for different conditions,” says Siddharth Singhal, Business Head - Health Insurance, Policybazaar.com.
Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI), points out the factors that you should keep in mind if you are planning to go for a stand alone critical illness insurance policy as it offers
- Lump-sum payout on diagnosis.
- Higher coverage (₹25 lakh to ₹1 crore).
- Covers multiple stages & recovery costs.
- Can be bought in addition to health or term insurance.
Also read: Now injury from sports and gym also covered in this new health insurance policy, check details
Is a comprehensive health insurance plan with critical illness cover better than the above two?
A comprehensive health insurance policy which includes critical illness cover provides you a wider protection in terms of coverage. “A comprehensive plan that combines standard health and critical illness benefits gives the best of both worlds. It ensures wider protection, fewer policy overlaps and ease of management” says Joshi.
“Although the premiums of such plans are slightly higher, they ensure you’re covered for both hospitalization and major illnesses without the need to juggle multiple policies and reduce the chance of under-insurance. For people who prefer simplicity and holistic coverage under one plan, a comprehensive health-cum-critical illness policy is often the most practical and beneficial option”, Joshi added.
However, Bharindwal points out that many critical illness riders do not pay you the sum insured as a lump sum amount but make payment through a reimbursement mechanism where payment is limited to expenses incurred. The illnesses that are covered in these plans are limited.
Is a critical illness rider with a life insurance policy a better option?
Critical illness plans are also offered with life insurance policy as a rider or add-on. Bharindwal lists out the merits and demerits of this option.
- Cheaper premium.
- Simple to add.
- coverage is often limited (₹5–20 lakh).
- Payout reduces life cover if linked to sum assured.
Abhishek Kumar, founder of Sahaj Money also explained, “The choice between a standalone or as a rider along with life insurance or health insurance plan would depend on the coverage requirement and budget. If one is looking for broader coverage with higher sum insured options and greater flexibility in customisation then a standalone critical illness policy is a better option. However, it comes with higher premiums”.
Also read: First-time health insurance buyer? 7 smart tips to choose the right policy and avoid costly regrets
So, how much critical illness cover do you need?
The amount one would need depends on the number of factors such as the cost of treatment, the person’s liabilities, monthly expenses and many others.
Arti Mulik, Chief Technical Officer, Universal Sompo General Insurance said: “In India, critical illnesses, like cancer, heart surgery, or organ transplants can easily range from ₹20–30 lakh just for treatment, with additional costs incurred for loss of income, rehabilitation, and treatment extending beyond hospital discharge. A straightforward approach to determining adequacy is to establish a goal of 3–5 times your annual income which allows you to deal with both medical and financial emergencies”.
While considering the amount of coverage, you must factor in where you live. “If you live in a metro city where treatment costs are higher, leaning toward the upper end, you may consider boosting your critical illness insurance cover. The goal is not just to survive a health crisis but to recover without financial stress,”he added.
Who should buy a critical illness cover?
Treating a critical illness can be long and quite expensive. For instance, the average cost of cancer treatment in India ranges from ₹5 lakh to ₹25 lakh. Besides, the treatment may not just include hospitalization but also various therapies like chemotherapy and radiotherapy.
In addition, you might have to leave your job during the treatment of your or your close family member, leading to a loss of income.
“Salaried individuals' income stops if they can’t work. Critical illness cover gives a lump-sum payout to manage expenses. Example: A 40-year-old IT professional suffers a stroke and cannot work for a year. Critical illness cover of ₹25 lakh helped pay EMIs and therapy,” says Narendra Bharindwal, President, Insurance Brokers Association of India (IBAI).
If you have a family history of critical illness and poor lifestyle in terms of food habits and work pressure, then you might be susceptible to lifestyle diseases such as heart attack, stroke, obesity, hypertension, etc. “Individuals with a family history of critical illnesses often opt for the critical illness cover. Good insurance advisors help customers make the right choices through effective fact finding analysis,” Rahul Mathur, CEO of Roinet Insurance Broker Pvt Ltd said.
Another key point to consider for a critical illness cover is that if you are the breadwinner of your family, it helps make sure that your loved ones won’t face financial strain during a medical crisis.
Experts suggest that critical illness cover ensures financial stability during tough times especially when you or a family member is diagnosed with a serious illness.
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