A rapid increase in the cost of healthcare has emerged as a major worry in India. In 2019, healthcare inflation rose at double the rate of retail inflation, which means the cost of medical care is rising faster than that of other goods and services. Rising cost coupled with increasing incidence of lifestyle diseases has made having a financial buffer important. Most people purchase a health insurance plan with the aim to manage health emergencies. But health insurance may prove to be inadequate in a large number of cases. Life insurance plans with critical illness benefits can be the answer to inadequate health cover.
There are various types of life insurance plans. One can choose a term plan or a unit-linked plan depending on his/her requirements. A majority of life insurance plans offer optional covers to enhance the basic cover. One can opt for optional riders by paying an additional premium. Typically, critical illness benefit is offered as an optional rider with a life insurance policy and it covers diseases like cancer and heart and liver ailments. However, some life insurance policies also offer cover for critical illness as a default option.
When one hears about anything related to a disease or hospitalisation, health insurance is the first thing that comes to the mind. Health emergencies have the power to alter the financial position of a person. If you do not have adequate insurance cover, treatment of critical diseases can burn a hole in your savings.
Health insurance plans have a few gaps which can be filled by critical benefit under life insurance. The treatment of critical diseases like cancer or heart and liver ailments is extremely expensive. A single dose of medicine in the case of certain types of cancer can cost several thousand rupees and a successful treatment requires multiple doses. The bill for treatment of cancer can run into several lakhs of rupees. Most health insurance policies generally cover only the cost of hospitalisation.
The total cost of a critical illness can be much more than the expenses incurred on the treatment. Critical illnesses often leave the affected individual debilitated. It can lead to a loss of income and can even affect the employability of the individual.
There are various types of life insurance policies. Life insurance can be used to financially secure your family in your absence as well as a savings instrument. But the primary goal of a life insurance policy is to provide a financial buffer to your family in your absence. Life insurance policies like a term plan pay a lump-sum amount in the event of the insured’s death. With a critical illness benefit, the life insurance policy pays a lump-sum amount to take care of the various costs associated with the illness. The amount paid is equal to the sum assured as part of the critical illness benefit rider and is generally separate from the death benefit or maturity benefit guaranteed by the policy. Some insurers deduct the amount paid as critical illness benefit from the sum assured and accordingly revise the death benefit. Some insurance companies pay the critical illness benefit over and above the sum assured.
The broad list of critical diseases covered under the benefit is the same for all the insurers. However, there can be slight differences between insurance companies. Diseases like heart attack, cancer, paralysis, major organ transplant, stroke, kidney failure and many more serious illnesses are covered under the critical illness benefit.
The disbursal of funds under the critical illness benefit is not dependent on the treatment of the disease. Insurance companies pay the critical illness benefit taken with life insurance policies as soon as the insured is diagnosed with an illness covered under the critical illness benefit rider.
While buying a life insurance policy, very few people take into account critical illness benefits. It can be used to reinforce the existing health plan. Canara HSBC Oriental Bank of Commerce Life Insurance iSelect+ Term Plan offers terminal illness benefit with all the coverage options. The iSelect+ Term Plan can be easily customised as per your requirements.
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