Critical illnesses are affecting a large part of the world’s population in the present time and getting them treated can cost a person more than he/she can afford. Critical illness can be a drastic life-changing experience, especially with expenses are sky-rocketing. This means that a family needs more financial support than they already have to get through the difficult times. What they really need is critical illness insurance that can take this financial burden off their shoulders.
The insurance might not be able to save a person’s life but it surely will act as a financial aid just when they need it most. So, before we understand why we need to buy it, let us first understand critical illness insurance pros and cons and what it is.
What is a critical illness insurance policy?
Critical illness insurance policies are synonymous to health insurance policies. The only difference is that while health insurance covers general medical requirements with certain exclusions, critical insurance policies give cover for a set list of critical illnesses and surgical procedures. There are several features of a critical illness policy that one must understand before making a purchase. Some of the features are as listed below.
List of critical illnesses covered
Procedures for filing a claim
Now that the features have been understood, let us move ahead and assess the critical illness insurance pros and cons that are involved in buying this insurance policy.
Critical illness insurance pros and cons
The pros and cons below will help you assess whether you should buy a critical illness plan. Let’s see what they are.
Critical illness plans can assist the insured in paying the expenses of costly medical treatments for a certain set of diseases. If any illness is diagnosed and meets the requirements of a policy the insured receives a lump sum amount to meet his/her medical requirements.
Critical insurance policies offer a bigger cover but at a cheaper price than other comprehensive medical insurance plans since it covers only specific critical illnesses.
Critical illness payouts are exempt from taxes under Section 80D of the Income Tax Act.
Even if a person takes treatment outside of the country, critical insurance policy still covers the insured. This means that the policy can assist the insured even if they need to go abroad for further medical treatment.
The first disadvantage of a critical illness plan is that the payout is only given when a critical illness is diagnosed. This means that you will only be covered only if a doctor confirms that a person’s illness concurs with the policy’s definition of ‘critical’ otherwise no payment will be made.
The second disadvantage is that critical illnesses are defined limitedly by insurers. That is why there is no absolute guarantee that a person will receive the sum insured even if they are diagnosed with a critical illness listed in the policy.
Critical Illness policies are very unclear due to the fine print that only the insurers can understand.
Do you really require Critical Illness Insurance?
Whether you require critical illness insurance is a decision that you must make after having weighed the pros and cons carefully. It is always said that one must read the terms and conditions of a policy document scrupulously before signing it. The same condition applies to critical illness plans as well. Hence, ensure that you read the exceptions and exclusions to ensure that you have the right kind of cover in your hands.