7 Myths & Facts about Critical Illness Insurance You Must Know 

A critical illness insurance policy is a fixed benefit health insurance plan. It covers a list of specific critical illnesses and treatments. So, if you are diagnosed with any  covered illnesses, the sum insured is paid as a lump sum.

Critical illness insurance plans have become an essential requirement in today’s age. In the insurance policy, critical illness means illnesses and treatments which require advanced medical attention and are expensive to treat. Such acute illnesses cause considerable physiological and financial trauma. According to reports, treating them is quite expensive. For example, lung diseases can cost as much as ₹20 Lakh, liver ailments ₹18 Lakh, and cancer treatments can go up to ₹10 Lakh.

A critical illness insurance policy becomes necessary to protect yourself against the financial implications of such illnesses. The policy covers all kinds of acute illnesses, such as terminal diseases like cancer, and pays a lump sum benefit if you or your loved ones are diagnosed with one. This lump sum benefit can help you avail the best treatment possible or take care of other financial liabilities.

The critical illness insurance cover, however, has some technical aspects to it. Unfortunately, many individuals don’t understand the technicalities of the coverage. This has, thus, caused some common myths about it to abound. So, let’s bust these common myths and see the real picture behind a critical illness insurance cover.

There are myths and facts about critical illness insurance that can be confusing especially when people don’t know the details of the policy and how claims work. These misunderstandings about illness insurance can cause wrong ideas about the illnesses covered, who is eligible and what benefits are available. Learning the truth behind each myth can help clear up how this kind of insurance works.

Myth 1: Critical Illness Insurance Covers All Diseases

Some people think that critical illness insurance covers every illness because the policy is meant to help with major health problems. The truth is that coverage is only for illnesses that are specifically listed in the policy.

Fact: A critical illness insurance Plan covers specific illnesses only.

Some people may assume that critical illness insurance covers all kinds of illnesses, as it is meant for people facing major health emergencies.

A critical illness insurance plan only covers specific illnesses mentioned in the policy.

The policy wording determines the list of illnesses covered under the plan. Although the illnesses included in the cover may be serious and costly to treat, they are not covered automatically. There must be a medical diagnosis that meets the policy's definition of a covered illness for the claim to be approved.

Fact: Claim payment under critical illness plans is subject to certain terms and conditions.

A person may believe that a diagnosis of an illness mentioned in the plan should result in an approved claim automatically.

Claim payment under a critical illness insurance plan is subject to specific terms and conditions.

Apart from the policy wording for each covered illness, there are conditions and requirements that must be met before a claim can be approved following a diagnosis.

Fact: You are eligible for claim payment only after a stipulated period.

If a person is diagnosed with any of the illnesses covered under critical illness insurance, they may expect to claim immediately.

The diagnosis of an illness is only the beginning of the claims process.

One of the limitations that may apply is the waiting period requirement for claim approval. Another condition may be the survival period requirement. The applicable periods and conditions depend on the policy terms.

Fact: There are both standalone plans as well as riders available for critical illness coverage.

Some people think they need to buy a separate policy to get critical illness coverage. This can happen when they don’t know about the options that some insurance products offer.

There are both standalone plans and add-ons for critical illness coverage.

A standalone plan provides coverage under its own terms and conditions, while an add-on extends the coverage of an existing policy. It is necessary to go through the terms and conditions of each rider# and standalone policy to understand the exact coverage.

Fact: A critical illness plan can supplement your existing health insurance policy.

Sometimes, when purchasing an insurance product such as health insurance, a person may assume that critical illness coverage is already included under the regular health insurance policy. This can lead to the misunderstanding that both serve the same purpose.

A critical illness plan is different from health insurance cover.

The two types of insurance policies provide different benefits under different terms and conditions. Health insurance generally covers eligible treatment expenses under the medical coverage. Critical illness insurance provides a lump-sum payment for a covered illness if the diagnosis and other claim conditions meet the policy requirements.

Fact: Premiums of critical illness plans are affordable.

Many people believe that critical illness insurance is easily affordable because they see low initial premium offers online. However, there are several factors that should be considered when determining the cost of coverage.

Premium costs vary between insurance policies based on several factors.

Age, medical history, gender, the amount of coverage and other personal factors can affect the premium charged to a policyholder. The final cost depends on the insurer's assessment and the coverage selected.

Fact: Pre-existing illnesses increase your health risks. However, this does not mean that you cannot buy critical illness insurance.

An applicant may think that an insurance application will be rejected immediately if they have a pre-existing condition involving an illness or injury.

Pre-existing conditions can affect an insurer's decision, but they do not always result in rejection.

Depending on the underwriters' evaluation of the condition, the insurance company may accept or reject the application or offer coverage with specific terms and conditions. Applicants should disclose their medical history accurately and check how their condition affects the coverage.