Why Do You Need A Critical Illness Insurance Plan?

Why Do You Need A Critical Illness Insurance Plan? Square Insurance - 21 Mar 2022

An additional premium is required for most health insurance policies to include a critical illness rider that covers exorbitant hospitalisation and treatment costs. The most expensive medical care required to treat long-term or serious illnesses is covered by critical illness insurance.

What is Critical Illness Insurance?

An insurance policy covering critical illness can greatly reduce medical expenses associated with serious illnesses. Cancer, heart attacks, kidney failure, and other critical illnesses are all covered by the Critical Illness Policy.

Critical Illness Insurance: The Benefits

Critical illness insurance plans include the following features:

  • Critical illness coverage - plan covers up to 36 critical illnesses including cancer, kidney failure, heart diseases, etc.
  • Payments in lump sum - Insurers provide lump sum payments for treatments of covered illnesses.
  • Claim processing - The diagnosis report(s) can be used for fast and simple claim processing.
  • The waiting period is usually over once the coverage begins.
  • Income Loss- You can use part of the lump sum as income replacement.

Critical illness insurance has several advantages

If you were unable to work due to a critical illness, could you support your family financially? Moreover, how will you pay for the medical expenses incurred?

Our goal is not to scare you, but to make you aware of the severe situations a critical illness can bring on.

A critical illness policy is a foolproof way to protect yourself from critical illnesses. On diagnosis of covered critical illnesses, you will receive a lump sum payment.

Covers Critical Illnesses under an insurance policy

Under the Income Tax Act of 1961, the policyholder can receive tax benefits. Income tax exemptions up to Rs. 15,000 are provided by Section 80D of the Income Tax Act of 1961. Under the same section, senior citizens can receive up to Rs. 20,000 in tax benefits.

Critical Illness Insurance: Why is it important?

Consider the following factors when choosing a critical illness insurance plan:

The parameters Information
Insured Amount An amount equal to the sum insured in a lump sum
There is a waiting period During the first 30 days after the policy starts
Time Period of Survival Within 30 to 90 days
Covered diseases Depending on the provider, there are 8-36 illnesses
Age of Renewables Renewability over a lifelong period or maximum age

Health Insurance Plans vs. Critical Illness Insurance Plans

When Neeraj learned he had a brain tumour, he was utterly devastated.

assured of Rs. 10 Lakh. However, his business revenue started declining, and he was devastated. His illness left him unable to conduct business as usual. Consequently, the business's financial health deteriorated (along with his health).

Like Neeraj, many people don't understand the difference between a health insurance policy and a critical illness policy

Critical illness health insurance plans differ in several ways.

The parameters Plans that cover critical illnesses Plan for Health Insurance
Definition Cancer, paralysis, and other life-threatening diseases are covered. Hospitalisation expenses are covered as part of the coverage.
Advantages The policy does not require hospitalisation to be eligible for benefits. The only requirement is diagnosis. Bills submitted by the insured can be reimbursed for hospitalisation fees incurred. Additionally, network hospitals offer cashless services.
Coverage There are 36 critical illnesses covered by this plan. The plan covers pre-hospitalization costs as well as post hospitalisation costs
Waiting Time Depending on the severity of the illness, there is a waiting period. There is a 30-day waiting period.

The following illnesses are covered by critical illness insurance

The following illnesses are generally covered by critical illness insurance plans:
  • A cancer that has reached a certain stage
  • First heart attack
  • Bypass surgery for the coronary arteries of the heart
  • Replacement of the heart valves or open heart surgery
  • The severity of a coma is specified
  • Dialysis is required for kidney failure
  • Having a stroke
  • Transplanting major organs
  • Transplanting bone marrow
  • Legs permanently paralyzed
  • A neurodegenerative disorder, Amyotrophic Lateral Sclerosis (ALS) affects the motor neurons.
  • Sclerosis multiplex
  • Aplastic anaemia
  • Meningitis bacterial
  • Speechlessness
  • Liver cancer at the end of its course
  • Hearing loss
  • Lung disease at the end of its course
  • A full-blown viral hepatitis
  • Burns of major significance
  • Muscular dystrophy

Please note that this list is not exhaustive and is only indicative. Different critical illness insurance policies cover different critical illnesses.

Insurance policies that exclude critical illness

The following conditions are generally not covered by critical illness plans:

  • During the waiting period, a critical illness was diagnosed that was covered
  • A critical illness or surgery within 30 days of diagnosis
  • As a result of smoking, tobacco use, alcohol consumption, or drug abuse, a critical illness develops
  • An illness that develops as a result of an internal or external congenital defect
  • Critical conditions related to pregnancy or childbirth
  • A disease resulting from war, terrorism, civil war, navy or military operations
  • Cosmetic surgery or dental care
  • Treatments for infertility/treatments for assisted reproduction
  • Treatment with hormones
  • Outside of India, treatment was received

Critical illness insurance is needed

It is more important than ever to have a critical illness policy. In the 21st century, sedentary lifestyles are giving rise to a host of illnesses, most of which are critical in nature. According to different studies, critical illnesses are becoming more common. There is an increase in people developing or contracting critical illnesses, but the average age at which they do so is consistently decreasing. As a result, millennials are more likely than previous generations to develop critical illnesses.

What Are the Benefits of Critical Illness Insurance?

As hospitals spend heavily on super-specialty equipment, the treatment is improving every day. As a result of medical inflation and this, treatment costs are rising. Medical bills can quickly spiral out of control when a person is hospitalised.

Breast cancer drugs like Herceptin (breast cancer medicine) can be pricey for women who have the disease. The patient requires at least 16 vials during the treatment. There is a considerable cost associated with that.

In light of the high costs of treating critical illness, opting for the best critical illness plan makes sense.

An insurance policy for critical illness can benefit the following people:

Those whose families have been affected by critical illness

Critical illnesses typically run in families, which means they are hereditary. People with a history of critical illness are at a much greater risk of developing one themselves. Critical illness insurance policies are beneficial to those whose family has a history of critical illness.

Families with only one breadwinner

An individual's role and importance as the family's primary breadwinner is paramount. The future financial security of the family will be severely impacted if something happens to them. Financial hardship may even be a possibility. Especially if a family member has a medical history, earning members of the family should purchase critical illness insurance protection.

Those with high-pressure jobs

High-pressure jobs have a high correlation with critical illnesses. Various studies have shown that people who work in high-pressure environments are at greater risk for developing a critical illness. Critical illness insurance is a great idea for employees whose jobs put a lot of pressure on them.

Those over 40 years of age

Critical illnesses are more likely to develop in people who are over 40. In their late 30s, they should purchase a critical illness insurance policy. In addition, they are likely to have a better financial position and be able to pay their premiums easily.

What is the process for filing a claim for critical illness insurance?

Contact your insurance company and register your claim if you need to file a claim. In most cases, you'll need these documents:

  • Completed claim form
  • Photocopy of the ID card
  • Doctor's diagnosis of critical illness verified by a medical certificate
  • A detailed summary of discharge

The claim team would verify the details once they received the above documents. Once your claim has been verified, it will be approved or denied. If your claim is approved or denied, you will be notified.

Choosing a critical illness insurance policy: Things to consider

The following factors should be taken into consideration before purchasing a critical illness insurance plan:

Assured Sum

Determining which insurance policy is right for you depends on the amount of cover. In some instances, critical illness treatment costs less than in others. You will be able to choose the right plan for your needs if you know how much coverage you want. Find the critical illness policy that works for you with a critical illness insurance quote from our website.

In addition to the standalone policy, a term insurance plan with critical illness rider offers comprehensive coverage.

What is a critical illness rider?

What is a critical illness rider? a rider, a standalone policy is more expensive, so it provides comprehensive coverage. As compared to a rider, a standalone critical illness insurance plan provides a greater scope of coverage. Although a rider may provide coverage for the same set of critical illnesses, the amount covered or the sum assured will be considerably less. The reason is that the rider depends on the base policy. The critical illness rider will only provide coverage for Rs. 2 lakh if, for instance, the healthcare policy or mediclaim covers Rs. 2 lakh. Insurance experts recommend choosing a standalone plan if you want comprehensive insurance coverage.


It is important to research the sub-limits of your critical illness insurance policy since they affect the costs you would incur. A critical illness insurance plan includes sub-limits applicable to the total sum assured. When a critical illness policy with a sum assured of Rs. 5 lakhs has a sub-limit of Rs. 1.5 lakhs for tests and Rs. 2 lakhs for surgery, it will cover up to Rs. 3 lakhs. According to the incurred expenses, you may have to pay up to 2 lakh from your own pocket. Some critical illness insurance policies cover surgeries better than others, while others may cover tests better. Before you purchase critical illness insurance, it is important to be aware of the limitations

Inclusions and Exclusions

Some of the general inclusions and exclusions of a critical illness insurance policy are listed above, but you should always read the policy to determine the exact inclusions and exclusions. As a result, you will gain a better understanding of the plan. A critical illness policy that focuses primarily on cardiovascular diseases may exclude coverage for cataracts or cancer, for example. Be sure to check the details beforehand if you are planning to insure against a particular set of diseases.

The critical illness insurance plans that cater to senior citizens offer a wider range of coverage and are more expensive.

As a result, seniors have a higher risk of developing critical illnesses than young adults. According to insurance experts, you should choose a critical illness insurance plan based on your age.

Maximum Renewal Age

Some critical illness insurance policies provide coverage up to a specified age while others provide lifelong coverage. If you are an insured, you should know when you can renew your policy. You may not be able to renew your policy after 60 years, for example. A critical illness insurance plan with a maximum renewal age is recommended by insurance experts.

Waiting Period

Generally, critical illness insurance policies come with a waiting period. Therefore, the policyholder will be able to avail of critical illness insurance coverage following the expiration of the waiting period. Choosing a critical illness insurance plan with a short waiting period is recommended by insurance experts.

Is Square Insurance a good fit for you?

Protect your financial future with a critical illness policy.you can lose all of your savings in one fell swoop. A few clicks at Square Insurance will help you compare and choose the best critical illness plan. We can assist you in evaluating the available insurance policies based on your insurance needs. The best insurance plan at the best premium is what we will help you find. We have trained customer service representatives who can help you choose the right protection for your needs.

At Square Insurance, you can avail the following benefits:

  • Compare rates from top insurers for free
  • Plans with the lowest premiums for critical illness
  • Critical illness policy issuance online in an instant

1. Is critical illness rider worth it?Exactly what is Critical Illness?

As a rider as well as a standalone plan, Critical Illness covers you against critical illnesses. If an insured person is diagnosed with a critical illness such as cancer, multiple sclerosis, heart attack, paralysis, kidney failure, etc., they will receive a lump sum payment. Prior to claiming the first diagnosis, the insured has to wait for 30 days.

2. Why do we need Critical Illness Insurance Cover?

Critical illness is often excluded from standard health insurance policies. A lump sum payment is simply insufficient to cover the enormous expenses associated with treating such a critical illness, even if covered. To ensure your financial well-being, it is vital to get critical illness insurance.

3. What are its key features of critical illness insurance?

A standard health insurance policy excludes major illnesses from coverage. When diagnosed with a covered illness, the insured receives a lump sum payment. A medical check-up is not necessary for most critical illness insurance plans up to the age of 45. These policies provide tax benefits as well as no-claim benefits.

4. What is the right amount of critical illness insurance for me?

Age, lifestyle patterns, location, and annual income are all important factors that determine the type of coverage you need.

5. What documents do I need for critical illness insurance?

The government generally requires proof of age, address, and identity. The insurance buyer may also need specific documents if he or she needs to undergo medical tests.

6. Does life insurance cover critical illness?

Life insurance plans do cover specific critical illnesses through add-on riders.

7. Is critical illness insurance available after cancer?

The majority of insurers cover you if you have coverage before the diagnosis. Certain insurers offer coverage after the diagnosis as well, but it varies from company to company.

8. What is the recommended coverage?

Age, lifestyle patterns, location, and annual income are all important factors that determine the type of coverage you need.