How Critical Illness Cover With Health Insurance Differs From That With Life Insurance

A critical illness insurance policy delivers a lump sum benefit to pay for the price of care and treatment for specific illnesses as well as the related costs of recovery. Additionally, if you have any extra money, you can pay off debts like loan EMIs with it. Critical illnesses include, among others, cancer and heart/kidney conditions.

Here’s how to purchase critical illness coverage with life and health insurance.

  • Critical Illness Cover With Life Insurance

A critical illness policy can be purchased as a standalone or a rider with life insurance. There are two critical illness riders, each with an additional premium cost. They are as follows:

  1. Extra Benefit: The critical illness sum assured is added as an additional cover, meaning that it will be paid besides the base sum assured. In this case, even if the critical illness rider is used, the life insurance policy keeps the same sum assured.
  2. Accelerated Benefit: This benefit is opportunistically incorporated into the life plan. When a legitimate claim is made, the critical illness sum assured is paid and deducted from the life insurance sum assured.
  • Standalone Critical Illness

A life insurer’s term policy with standalone critical illness insurance will provide financial stability for “your family.” Additionally, 50 potentially fatal diseases like cancer, kidney failure, cardiovascular disease, etc., will be covered by the standalone necessary illness insurance, providing coverage for “you”.

  • What You Ought To Do

In the case of a life insurance policy with critical illness coverage, hospitalisation costs are not covered. It would also help to compare the prices of a critical illness rider and a standalone CI cover. According to experts, you should be aware that when you purchase a standalone policy, both risks are covered—the risk of passing away and becoming critically ill, where you are still alive but require financial support to receive excellent care.

  • Critical Illness Health Insurance

A critical illness insurance policy operates under the defined benefit principle; it is a plan that pays out a lump sum (sum insured) in case you are found to have a covered critical illness. In addition to standalone policies and riders to base health insurance covers, general insurers also offer essential illness coverage.*

  • Rider or Standalone Plan

The number of critical diseases covered by essential riders of illness will be specified (typically very few), as will the lump-sum benefit that will be paid, as well as the waiting and survival period (if applicable). The insured can use both policies (CI and health cover) to reduce the overall cost of hospitalisation if they are hospitalised for treatment after being diagnosed with a critical illness. This means that upon diagnosis, the insured will receive a lump sum payment for therapy through the insurer’s essential illness coverage and basic health insurance policy; the insured will receive reimbursement for hospitalisation costs by submitting medical bills to the insurer.*

You can also avail of tax benefits on health insurance when you purchase health insurance. **

*Standard T&C apply

** Tax benefits are subject to change in prevalent tax laws.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

Leave a Reply

Back to top button