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Critical illnesses are those which are life-threatening and require extensive and advanced medical treatments. Since such treatments can be pretty expensive, signing up for critical illness insurance coverage is advisable.
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 of the covered illnesses, the sum insured is paid as a lump sum.
Critical illness insurance plans have become an essential requirement in today’s age. Critical illness, in insurance, 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. Lung diseases can cost as much as ₹20 lakhs, liver ailments ₹18 lakhs, and cancer treatments can go up to ₹10 lakhs.
To protect yourself against the financial implications of such illnesses, a critical illness insurance policy becomes a necessity. 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. 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.
Myth #1: A critical illness insurance policy covers all types of illnesses.
Many people believe that if they purchase critical illness insurance, they are covered against all possible illnesses that they might face.
A critical illness insurance policy covers specific illnesses. The illnesses covered under the scope of the plan are listed in the plan benefits. If you are diagnosed with any of the covered illnesses, then only can you claim the same. If, on the other hand, you suffer from a disease not covered under the scope of the policy, you’ll not be eligible for the claim.
Myth # 2: If I am diagnosed with an illness mentioned in the coverage, I would surely be eligible for the claim.
If you think that based on the diagnosis of a covered illness, you are automatically eligible for the claim, think again. Do you know what is considered a critical illness for insurance?
There are some terms and conditions attached with claim payments under critical illness insurance plans. They cover illnesses of a particular nature and severity.
For example, critical illness plans usually cover the first heart attack. So, if you suffer a heart attack after buying the coverage but the attack is not the first one you have suffered, no claim would be paid. Similarly, cancer of a specified severity is covered under the plan. So, unless your illness matches the plan’s definition of the same, you would not get a claim.
Myth # 3: I get a claim immediately on diagnosis of a critical illness.
There is a specific survival period under critical illness insurance plans. This period usually ranges from 30 days to 90 days. The claim is then paid after the diagnosis is over.
Myth # 4: Critical illness cover is available only on a standalone basis.
While it is true that standalone plans are available, you can also avail coverage through a critical illness rider. Many life and health insurance policies offer critical illness riders that can be added to the policy at a low premium.
Tata AIA Life Insurance also offers various life insurance plans with critical illness riders. So, to avail of critical illness coverage, you don’t need to opt for a standalone plan. You can go for the rider option too.
Myth # 5: I have health insurance. I don’t need critical illness insurance.
Health insurance plans do cover the treatments associated with critical illnesses. However, as the treatments are expensive, your policy might not provide optimal coverage. Moreover, there are other financial implications of a critical illness too.
For instance, you might need home nursing, international treatments, or you might lose your job and need to provide for your family’s needs. These costs might not be covered under health insurance plans. A critical illness insurance cover provides you with a lump sum benefit that you can use at your discretion. It, therefore, supplements your health insurance coverage and is recommended.
Myth # 6: Critical illness plans are expensive. I cannot afford the premium.
Critical illness coverage is not expensive. Standalone critical illness insurance plans have affordable premiums. Moreover, if you opt for the critical illness rider, the premium is marginal against the coverage. So, debunk the myth that the coverage is expensive. It is not.
Myth # 7: I have pre-existing conditions. I am not eligible for critical illness insurance coverage.
In case of pre-existing conditions, the insurance company might require you to undergo a pre-entrance health check-up before the policy is issued. Moreover, you might have to pay a higher premium due to the increased health risks. But, your pre-existing conditions would not make you ineligible for the coverage. You can buy critical illness insurance plans even with pre-existing diseases.
Now that you know all the facts, it is time to understand the nuances of the cover and invest in the best critical illness insurance plan. It would prove to be a saviour in medical contingencies as you’d be able to get the much-needed financial assistance to face the illness head-on.
It’s time to shed your preconceived notions and understand the basics of critical illness insurance in India. Invest in a suitable critical illness insurance policy or a rider and protect your finances from being drained on expensive treatments.
What’s more, you can also get a tax* benefit in the process. The premium paid for the critical illness cover is allowed as a deduction from your taxable income under Section 80D of the Income Tax Act, 1961.
A critical illness policy is the need of the hour, given the rising cases of illnesses. It is worth investing in critical illness coverage, either on a standalone basis or as a rider.
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#Riders are not mandatory and are available for a nominal extra cost. For more details on the benefits, premiums and exclusions under the riders please refer to the Rider Brochure or contact our Insurance Advisor or visit our nearest branch office.
*Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
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