With rising medical costs and an increase in life-threatening diseases like cancer, heart attacks, and organ failures, having just a basic health insurance policy may not be enough. In such a scenario, adding a critical illness cover to your existing health insurance becomes a smart move to manage heavy medical expenses without digging a hole in your savings.
Let’s explore why adding critical illness cover to your health insurance can be wise.
What is Health Insurance with Critical Illness Cover?
A critical illness cover in your health insurance policy provides a lump sum payout if you’re diagnosed with a specific serious illness covered under the plan. These typically include life-threatening conditions like:
- Cancer
- Heart attack
- Stroke
- Kidney failure
- Paralysis
- Major organ transplant
- Coronary artery bypass surgery
Benefits of Health Insurance with Critical Illness Cover
A critical illness plan provides financial support if you’re diagnosed with a severe health condition. Here’s why it might be beneficial:
1. Lump Sum Payout
Most plans offer a lump sum payout to help cover treatment, daily living expenses, or even home care upon diagnosis.
2. Tax Benefits
Insurance premiums paid towards these plans are eligible for tax deductions under Section 80D of the Income Tax Act. Individuals can claim up to ₹25,000 annually for premiums paid for themselves, their spouse, and their dependent children. If the insured or their parents are senior citizens, the deduction limit increases to ₹50,000.
3. Peace of Mind
Knowing that you have a financial safety net if diagnosed with a critical illness can reduce the emotional and mental strain that often accompanies such a diagnosis.
Cost of Critical Illness Treatment in India
The table below showcases the estimated cost of treating critical illnesses in India, which makes buying critical illness cover a necessity:
| Illness | Treatment Cost |
| Liver Transplant | ₹25.4 lakh – ₹35.5 lakh |
| Heart Surgery | ₹1.9 lakh – ₹7.9 lakh |
| Cancer | ₹10 lakh – ₹15 lakh |
| Bypass Surgery | ₹1.9 lakh – ₹6.03 lakh |
| Breast Cancer Surgery | ₹1.9 lakh – ₹4.2 lakh |
| Alzheimer’s Disease | ₹40,000 and above per month |
| Lung Transplant | ₹13.9 lakh – ₹15.8 lakh |
*Disclaimer: These costs are charged in tier 1 hospitals. Actual costs may vary depending on the specific medical facility, the patient’s condition, and other factors.
Comparing Critical Illness Plans and Regular Health Insurance Plans
The table below highlights the difference between the critical illness plan and health insurance for parents and/or yourself:
| Features | Critical Illness Plan | Regular Health Insurance |
| Scope of Coverage | Focuses on specific life-threatening disease | Covers a wide range of medical issues |
| Payout | Lump sum payout given on diagnosis | Covers medical bills, hospital stays, etc. |
| Premiums | Generally higher due to specialised coverage | Usually lower, but vary with the coverage |
| Purpose | Support financially when diagnosed with a critical illness | Cover a broad range of medical needs |
| Waiting Period | May have a waiting period before the coverage kicks in | Usually, there is no waiting period |
| Preventive Care | Does not cover preventive health services | Often includes coverage for preventive care |
Who Should Buy Health Insurance with Critical Illness Cover?
A critical illness policy is ideal for individuals who want financial protection against life-threatening illnesses that require expensive and long-term treatment. Opting for critical illness cover is important for:
- Primary breadwinners of families who want to protect their income during recovery.
- Individuals with a family history of critical illnesses are at a higher risk of developing similar conditions.
- Self-employed professionals or freelancers who don’t have access to employer-provided health insurance.
- Individuals in high-stress or sedentary jobs often have the likelihood of lifestyle-related diseases.
- Anyone without a comprehensive health insurance plan, as regular policies may not cover the full cost of treating critical conditions.
Standalone Critical Illness Plan or Critical Illness Rider: Choosing the Right One
The standalone critical illness plan and the critical illness rider provide financial protection in unexpected emergencies, but they are quite different. Here’s the difference between the two:
Critical Illness Rider
- The rider is added to an existing health or life insurance policy.
- The critical illness rider is more affordable, making it suitable for those seeking basic, supplementary coverage.
- Adding critical illness to a health insurance policy offers limited coverage with fewer illnesses included.
- The overall coverage is tied to the base health insurance policy.
Standalone Critical Illness Plan
- It’s a separate policy dedicated solely to critical illness coverage.
- This plan offers a higher sum insured and a wider range of covered illnesses.
- Standalone critical illness plans offer greater flexibility in choosing coverage based on individual health risks.
- The plan is ideal for those seeking comprehensive protection independent of other insurance plans.
Thus, deciding between the two depends on whether you are looking for basic coverage at a low cost (critical illness rider) or extensive coverage (standalone critical illness). Choosing between plans depends on your needs and budget. Thus, you must assess your priorities and risks to decide what fits best for your family’s future well-being.