Critical Illness Insurance: Features and Benefits

8-June-2021 |

What is Critical Illness Insurance?


There is no way of predicting when life-threatening ailments can occur. Men and women both have a 39.5% chance of being afflicted with cancer in their lifetimes; globally, people suffer from strokes every 40 seconds.


Moreover, such critical health conditions require huge expenses. For this very reason, we recommend a critical illness insurance policy. Critical illness insurance is supplemental coverage that provides a lump-sum amount if the policyholder is diagnosed with any of the life-threatening conditions mentioned in the policy.


A critical illness insurance policy provides coverage against life-threatening diseases and conditions such as heart attacks, strokes, and kidney ailments, among a host of others. If you plan to buy critical illness insurance in India, Tata AIA Life Insurance’s Non-Linked Comprehensive Health Rider is a great option. They have a wide range of network hospitals, and the claim settlement process is fast and hassle-free. You could also go on their website and buy critical illness insurance online.


A critical illness insurance plan is best suited to cover serious ailments that require expensive procedures and treatment.


How Much Does Critical Illness Insurance Cost?


The premium amount of your critical illness policy will depend on the risk you present to the insurer. Factors such as age and pre-existing ailments affect the premium amount you pay when you buy critical illness insurance. Your premium can also increase if you use tobacco or work in high-risk environments.


One of the significant benefits of critical illness insurance is that you can buy it along with a life or health insurance plan. In such a case, the premium for a critical insurance plan in India cannot be more than 30% of the premium you are paying for your standard life or health insurance cover. You must also factor in critical illness insurance tax benefits while accounting for your premium cost.


Critical Illness Insurance Benefits and Features


A critical illness insurance plan provides cover for a host of ailments. There may be additions or omissions in the list of inclusions and exclusions, but the following are covered in almost every critical illness plan:


  • Heart attack and other heart-related ailments

  • Stroke

  • Cancer

  • Paralysis

  • Kidney Failure

  • Coma

  • Organ transplant


Among the main benefits of a critical illness insurance plan is that you can use the payouts in whichever way you want. Covering expenses that are not covered by a standard health insurance policy, such as out-of-pocket expenses, copays, deductibles, and experimental treatment, are a few reasons to buy critical insurance.


A severe illness can cause us to lose our earning capacity temporarily or even permanently. In such cases, a critical insurance policy can act as a source of income replacement and can help with loan repayments, rent, utility bills, childcare, and other everyday living expenses.


The premium for critical illness insurance is tax-free, and critical illness insurance attracts a tax benefit up to INR 25,000 under Section 80D of the Income Tax Act, 1969 if you are below 60. For those above 60, the critical illness insurance tax benefits are higher, up to INR 75,000 under Section 80D of the Income Tax Act. Critical illness insurance tax benefits also extend to the lump-sum payout received, which is entirely tax-free.


Another benefit of getting critical illness insurance in India is that it can be purchased as an add-on cover with life and health insurance policies to provide comprehensive coverage and additional tax benefits. Critical insurance policies can be purchased for individuals or as a family floater.


You can buy a critical illness insurance family floater plan to give your family an umbrella of coverage against the expenses associated with life-threatening ailments. Most insurers generally offer a lump-sum payout of the sum assured for critical illness insurance, or you can opt for a staggered payout with some insurers as well. When buying critical illness insurance, you can always look up various plans and compare them online to make an informed buying decision.

Why Do We Need Critical Illness Insurance?


We are prone to various risks, whether it be the risk of death, disablement, or disease. A life insurance policy covers the risk of death, while health insurance covers the cost of hospitalization.


Buying critical illness insurance cover is beneficial as the plan has a fixed benefit. In other words, it doles out a lump-sum payout in the event of being diagnosed with any of the ailments mentioned in the critical illness insurance policy. It is possible that after diagnosing and treating a critical ailment, you may need to be bedridden for a specific period.


Some critical illnesses may also lead to temporary or permanent disablement. The benefits of critical insurance cover can be seen in circumstances where you may require a fixed amount for completely recovering from a critical illness.


For all-rounded protection, it is advisable to purchase critical illness insurance along with your regular life or health insurance cover, where each insurance policy can serve a specialized purpose.


Life insurance secures your loved ones in case of death, health insurance covers hospitalization expenses, and critical illness insurance provides for contingencies outside the ambit of your standard life or health insurance cover.




Buying critical illness insurance is a great way to protect yourself from expensive procedures associated with specific ailments. You can compare quotes for policies online and purchase a plan within ten minutes, as the underwriting process for critical illness insurance in India is not as extensive as other insurance policies.


Critical illness insurance in India provides several payout options, with an increase in the payout leading to an increase in the premium you pay. When accounting for the amount you will shell out for the premium, it is essential to keep in mind critical illness insurance tax benefits as this will affect the overall cost of your policy.


Shopping for policies online and comparing them will give you an idea about the benefits of critical illness insurance coverage each insurer provides. While some may offer coverage for a few ailments, there are insurance companies that cover over 35 different diseases. Conduct thorough research and choose the critical illness insurance policy that best suits your needs.



Need help to choose the right plan?


By submitting your details, you are giving your consent to receive SMS/Call by Tata AIA Life Insurance Company Limited or its representative, with reference to this solicited inquiry even though you may be registered on the DND list. L&C/Advt/2019/Jan/075

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not a guaranteed issuance plan and it will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch

  • 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