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Why Critical Illness Coverage Is Important Today

One out of every four Indians today is susceptible to a non-communicable disease. Claim statistics across the globe suggest that we are five times more likely to contact a serious illness than die before the age of 65

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You are most likely to have a health insurance cover to protect your family and yourself, either from your employer, or you may have bought one. But does your mediclaim include critical illness coverage?

Increased cost of healthcare

One out of every four Indians today is susceptible to a non-communicable disease. Claim statistics across the globe suggest that we are five times more likely to contact a serious illness than die before the age of 65. Thanks to medical advances, we are more likely to survive these illnesses, but the treatments are still beyond the means of an average Indian. For example, the average cost of cancer treatment is Rs 10 lakh today, while organ transplant can cost between Rs 4 lakh and 20 lakh. Many of the deaths from heart diseases in the last decade could have been prevented, if families could cover the expenses. At current inflation levels, the costs will double every seven years.

Benefits of Critical Illness Cover

A critical illness (CI) cover could come in handy. It pays a lump sum within a month of diagnosis of any of the critical illnesses listed in the contract. Heath insurance policies typically leave out prescription co-pays, out-of-network treatments, and alternative treatments. Unlike health insurance that does not cover incidental expenses and can be claimed against medical expenses, the amount guaranteed under critical illness coverage can be used to pursue a less stressful lifestyle during the recovery period.

Survival period

Suppose an individual suffers a cardiac arrest and is hospitalised, but dies within 10 days. Even if the individual has a critical illness cover, the nominee may not get anything. This is because a critical illness cover demands a survival period of 30 days from the day the illness is diagnosed. Another aspect is the waiting period, which is usually 90 days from the date of issue. A prospective customer needs to be aware and watchful of these riders.

Safeguard financial status

A 2011 research paper from TISS, Mumbai, concludes that nearly one sixth of India’s poverty is caused by out-of-pocket health expenses. Treatment cost of a loved one can often run into several lakh. Experts advise that a fund equivalent to nine months of family income be set aside for such emergencies. But this is not possible for an average Indian. Instead, when an emergency hits, one borrows money or dips into their investment corpus.

To avoid that, one could buy standalone insurance to cover self and family with critical illness coverage that helps safeguard your investment corpus.

Here are a couple of points to consider before getting a CI plan:

1. Calculate approximate coverage: Depending on where you live, try to figure out the approximate cost of treatment for life-threatening ailments. If you live in a metro, the cost would be higher compared to tier 2 cities.

2. Diseases covered: Check the diseases covered by the critical illness plan you wish to buy. You can avoid unpleasant surprises by being prepared in case certain diseases aren’t covered.

We insist you get your health insurance plan audited and evaluate a credible CI plan, if you haven’t bought one yet!

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


Sanjeev Srinivasan

The author is CEO of Bharti AXA General Insurance

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