Best Tricks to Get a Cheaper Insurance for Critical Disease

When you consider all the items in your financial portfolio, it is prudent to have insurance feature near the top. As medical costs skyrocket, particularly for critical illnesses, being backed by an adequate insurance cover can be a blessing. That’s why, today, it probably makes sense to even include a critical illness cover to your existing life or medical insurance. 

What is Critical Illness Protection plan?

Once you have been diagnosed with a serious ailment (such as diseases of the heart, kidney, liver or cancer etc), a critical illness cover will offer you with a lumpsum amount that can be used according to your requirements. This could be towards your treatment at the hospital, your care at home or even to sustain yourself due to the loss of a job or make EMI payments. Once the insurer pays this lumpsum amount, the policy lapses. Generally, the payout happens 30 days after diagnosis. Also, it is legal to purchase more than one critical illness cover and have them each pay out if you are diagnosed with a serious ailment. But you can have other insurance like Cancer insurance policy

In India, there are 2 modes through which you can apply for critical illness coverage – through life insurance and through health insurance.

Critical Illness Through Life Insurance

If you have life insurance, you can get critical illness either through two kinds of riders, or as a standalone policy

Additional Benefit Rider: In this kind of rider, the amount for critical illness is simply an excess cover. Along with the base sum amount, the additional benefit will also be given. Despite using a critical illness rider, the life insurance policy will have the same sum assured, there will be no reduction.

Accelerated Benefit Rider: In this kind of critical illness, the sum assured is deducted from the base sum assured itself. Once a payout for critical illness is made, the life insurance policy continues with reduced amount. 

Naturally, the additional benefit rider will attract a higher premium than the accelerated benefit rider. 

Standalone critical illness cover: Buying this policy from a life insurer, means you are giving financial security to the nominees, while allowing yourself to access funds in case you are diagnosed with any of approximately 50 kinds of critical illnesses. 

Experts are of the opinion that it is important to understand that life insurance and critical illness cannot replace each other, they can only complement one another. One covers the risk of dying, and the other covers the risk of being critically ill but need funds. Since they are both independent events, they both must be valued differently.

Critical Illness Through Health Insurance

A regular health insurance policy covers hospitalisation charges along with expenses prior and after the hospital stay. A critical illness cover on the other hand, provides you with a lumpsum benefit after you have been diagnosed with a serious ailment. It hits two birds with one stone – you have additional funds to cover any excess treatmetn charges that a low health insurance limit can’t fulfil; and it lets you adjust your lifestyle, particularly if you have to give up your job or take a pay cut due to the illness. 

Just as with life insurance, critical illness coverage can be obtained as riders to existing health insurance policies or as standalone policies. 

The main difference of taking a standalone policy and a rider to an existing medical policy is that under riders, there are only a specific number of diseases that are covered, with the insurer determining the lumpsum payable, the waiting period and the survival period. Standalone critical illness covers on the other hand, are extensive when it comes to covering serious ailments. For example, a cancer insurance policy taken as a standalone policy will cover all kinds of cancer as well as early, steady or late stages of the dreaded disease. Similarly, if you are looking for the best covid insurance policy it makes sense to pick a standalone one to ensure you get maximum benefits, in case you are infected. 

An advantage to standalone policies is that if you are diagnosed with a serious ailment and need to be hospitalised, you can use the health insurance to cover all hospitalisation charges, and the critical illness cover to pay for any excess treatment charges, recuperation or any other expenses as required, thereby saving on overall costs. 

Experts say, ideally it is best to take a standalone critical illness policy rather than as riders from life or health insurance. Besides having greater coverage than rider benefits, and offering a lumpsum at the right time, standalone policies ensure that a families savings remain untouched in case you are diagnosed with a critical illness. There may be many expenses incurred outside the hospital (say with lab visits, home care, nutrition) and can’t be met by a regular health insurance policy. For all these and much more standalone critical illness policies will be a great relief.

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