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5 Common Misconceptions Regarding a Critical Illness Rider

04-06-2022 |

You can plan for most things in life and prepare yourself to deal with difficult situations in an adequate manner. However, you cannot predict the occurrence of a critical illness or ascertain in advance the impact it would have on your life and the lives of your loved ones.

According to the World Health Organisation, 41 million people die of Noncommunicable Diseases (NCDs) every year across the globe, accounting for 71 per cent of the annual global deaths. The most common NCDs are cardiovascular diseases, cancer, diabetes, and chronic respiratory disorders.

Therefore, it is important to consider a critical illness insurance plan so as to safeguard yourself in the event of the occurrence of a critical illness.

What is a Critical Illness Cover?




A critical illness cover is included in an insurance policy to provide financial protection to the policyholder if they develop one of the specified critical illnesses. Therefore, if the policyholder gets diagnosed with any of the diseases or lifestyle disorders covered in the critical illness insurance rider# to the basic policy, they are entitled to receive the sum assured in the policy. Some of the most lethal critical illnesses in the country have been listed below.

  1. Cardiovascular diseases
  2. Cancer
  3. Renal failure

Having a critical illness cover, thus, safeguards you against any financial losses borne due to a critical illness.

Here are Some Common Myths About a Critical Illness Rider #

Since a critical illness cover is a specific type of insurance cover, there are many misconceptions around its nature, structure, scope, and claim guidelines. Some of the aforementioned misconceptions have been discussed in detail below.

Myth 1: Protection against all critical ailments

Fact: It is a common misconception that a critical illness cover provides you protection against all critical illnesses. The fact is this coverage is restricted to the critical illnesses that are specifically mentioned in your policy document.

For instance, if someone is diagnosed with Type 2 Diabetes and assumes that it is covered under the critical illness benefit of their life insurance policy or standalone health insurance policy without ensuring whether the aforementioned disease is clearly mentioned in the policy, they will not be entitled to use the policy for any claim unless if the policy covers Type 2 Diabetes.

Therefore, it is of paramount significance to choose the adequate critical illness cover on the basis of your medical history along with that of your family. In addition to this, you must ensure that you read the policy documents thoroughly to gain a comprehensive understanding of the scope of the cover, including which diseases are covered and which aren’t.

Myth 2: A critical illness insurance  plan covers a disability

Fact: Sometimes, a critical illness cover is misinterpreted as protection against the financial loss borne by the policyholder due to a disability or a compensation avenue for their consequent loss of income. However, the fact is that a critical illness cover only safeguards the policyholder against specific critical illnesses which, unless otherwise stated in the policy document, does not include a disability.

Myth 3: Unlimited scope of coverage for a particular critical illness

Fact: You must not assume that a critical illness cover provides you total protection against the diseases mentioned in the policy document. The reality is that the scope of a critical illness insurance cover is very specific and clearly laid out in the policy document. In this context, you can only file a claim for a critical illness cover if the claim does not supersede the scope of the cover.

Myth 4: No eligibility criteria and the timelines for a critical illness claim

Fact: It is important to understand that being diagnosed with a disease included in your critical illness cover does not mean that you are eligible to receive an immediate payout to support your treatment. There are certain predefined timelines associated with a critical illness cover claim which need to be adhered to before a claim can be settled. In this context, the payout from a critical illness claim is usually subject to a critical illness continuing to persist 30 to 90 days after the initial diagnosis. This waiting period is different for different illnesses, thereby making the duration of the claim process variable.

Therefore, if you are diagnosed with a critical illness, you must inform your insurance provider and file a claim under your critical illness cover. Depending upon the nature of the disease, the claim will be settled 30 to 90 days following the diagnosis and you shall receive the lump sum amount mentioned in the policy.

Myth 5: The premium of a critical illness cover is high

There is a common misconception that a critical illness cover entails a high premium. In reality, however, the critical illness insurance riders# available for inclusion in a majority of life insurance policies these days have a minimal cost associated with them. Furthermore, standalone health insurance policies covering critical illnesses usually have affordable premiums as well unless the policyholder has an adverse medical history or enhanced risk pertaining to a particular disease.

How to Purchase Critical Illness Insurance?

There are several insurance companies in India that offer life insurance policies with a critical illness cover. However, if the life insurance policy selected by you does not comprise an in-built critical illness cover, you can opt to add a critical illness rider# to the policy.

It is important to note here that there is no such thing as a good  critical illness insurance policy since the selection of the policy depends on your medical history, your family’s medical history, particularly in the context of hereditary diseases, and the degree of protection you seek in your life insurance policy.

Therefore, you must carefully assess the above factors while selecting the adequate critical illness add-on. Remember that purchasing a  life insurance plus critical illness cover helps you enhance the scope of your financial security.

Tata AIA Life Insurance offers you the option to add a critical illness rider# to your insurance policy through two of its comprehensive health riders:

Conclusion

If you conduct some basic research and read your insurance policy carefully, it is unlikely that you will fall prey to any of the myths prevalent about critical illness insurance covers. Stay informed and choose your critical illness cover wisely.

L&C/Advt/2022/Jun/1121

 ***

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

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