What is Critical Illness Insurance and How is it Different?

Overview of Critical Illness Insurance Coverage and Benefits

As the name suggests, a critical illness insurance covers the expenses incurred in the treatment of life-threatening diseases. It is a type of health insurance that offers a lump-sum payout to the policyholders upon being diagnosed with critical illnesses like stroke, cancer, heart attack, etc.

You can buy a critical illness cover as a standalone policy or an add-on with your existing health insurance plan, as per your preference or needs. Learn more about critical illness insurance plans and make an informed purchase decision.

How is Critical Illness Insurance Different from Basic Health Insurance?

Though both health insurance and critical illness insurance offer financial coverage for your health needs, they differ in some respects. The table below shows the difference between health insurance and critical illness insurance:
 

How Does a Critical Illness Insurance Function?

Here's how critical illness insurance works:

1. Provides Payout as per Diagnosis

Critical illness insurance coverage is paid when the insured is diagnosed with any of the illnesses listed in the policy document. The payout will be provided only when the diagnosis is confirmed by a qualified medical professional.

2. Lump Sum Payment

The insurer will pay a one-time lump sum amount after your insurance claim is approved. Once the lump sum is paid, your policy will be terminated or continue as per the type of insurance plan you have chosen.

3. Survival Period Clause

Critical illness insurance comes with a survival period, i.e. the insured should survive for 15 to 30 days after being diagnosed with the critical illness. This provision guarantees that the claim is only admissible for severe conditions that have long-term effects.

What are the Benefits of Critical Illness Insurance?

Here are some of the notable benefits of critical illness insurance:

1. Provides Extensive Financial Support

Critical illness insurance provides a lump sum payout to the insured after being diagnosed with a listed condition. It offers access to quick cash support during a medical emergency.

2. Reduces Your Family’s Financial Burden

If you fall ill and can't work, your family will be burdened with medical expenses and daily living costs. The payout protects your family from financial hardship by providing funds for their daily needs while you recover.

3. Helps Avail Expensive Treatment at an Affordable Rate

Critical care can be very expensive, and even with comprehensive health insurance plans, not everything may be covered. The lump sum pays for these gaps, so you can choose the best treatment options without worrying about cost.