Life is unpredictable, and there may be times when your family requires more financial assistance than you have saved. A critical illness policy makes such painful times easier to bear, at least financially. Health insurance is unquestionably a solid source of financial assistance when you need it the most.
What is Critical Illness Insurance?
In contrast to a standard health insurance policy that covers hospitalization costs, a critical illness insurance policy pays a specific sum if you are diagnosed with any of the critical illnesses listed in the policy document. Starting shortly after the identification of the health concern, the lump sum payment can be utilized to cover household expenditures as well as additional diagnostic testing and treatment costs. When the payment is made, the policy expires.
Exclusions from the Critical Illness Policy
In general, critical illness insurance plans do not cover the following:
- Critical sickness was detected during the waiting time.
- Death within 30 days following a serious disease or surgical diagnosis.
- Smoking, tobacco, alcohol, or drug use causes severe disease.
- Internal or external congenital abnormalities cause critical illness.
Benefits from Critical Health Insurance
Before you buy it, let’s go through the benefits of a standard critical illness health insurance plan.
- Tax Benefit: The payout from critical illness insurance is totally tax-free under Section 80D of the Income Tax Act.
- Income replacement: Critical illnesses not only harm the person physically, but they also have a significant influence on the family’s finances. A critical illness policy provides a lump sum payment that may be used to cover medical and home expenses.
- No claim bonus: In the event that no claims are made against the critical illness cover, insurers will provide a no-claim bonus during the policy period, either in the form of a premium discount or an increase in the sum assured or the coverage given by the policy.
- Overseas medical treatment: A specific sum is paid upon the diagnosis of a critical disease under a critical illness insurance plan, regardless of whether the treatment is received in India or overseas. It indicates that the coverage can assist you if you need to travel overseas for additional medical care.
- Combined benefit: If not purchased separately, the plan can be combined with your basic plan. This may assist you in obtaining compensation for non-payable losses.
- Coverage after post-diagnosis purchase: Some insurers may also provide critical illness coverage once the critical disease is discovered. As a result, financial assurance against the same can be obtained even after the diagnosis, but at a larger premium payout.
In the event that you become unable to work due to a critical illness, critical illness insurance can help to reduce some of the financial stress. It gives you some freedom in that you may utilize the money handed out to fulfill a wide range of prospective requirements.