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Critical Illness Insurance

Critical illness is a dread disease or terminal illness, which may impose life-threatening risks to anyone. It is also called dread disease insurance, in which the health insurance provider is obliged to pay a lump sum amount to the insured person in case he/she is diagnosed with any of the pre-determined illnesses that are listed in the insurance plan.

Global and domestic reports reveal that one out of every four individuals (below the age of 70 years) is at a greater risk of dying due to critical illnesses, like cancer, kidney failure, and heart attacks, than ever before. And, looking at the rising medical costs in 2018, the cost of availing a medical treatment is going to surge by almost 5 times.

You can give your family some financial security with a life insurance policy (in case of your sudden demise). But, have you ever wondered how are you going to meet the medical cost without a critical illness policy, in case you are diagnosed with a life-threatening critical illness? It can be as terrifying as it sounds. At that time, only a critical illness insurance policy will serve as a helping hand for you and your family. We usually do not anticipate such health risks, but prevention is always better than cure, especially when it comes to your health!

Key Features of Critical Illness Insurance:

The key features of insurance policies are:

  • Provides Medical Cover in Case of Major Illness: These policies provide coverage against heart attack, cancer, stroke, coronary artery bypass surgery, deafness, blindness, kidney failure, paralysis, and multiple sclerosis.
  • Comparatively Shorter Waiting Period: Unlike comprehensive health insurance plans, the waiting period of critical illness policies is comparatively short. Most of the critical illness policies have a waiting period of 2 years to 4 years.
  • The Lump-Sum Amount is Paid Regardless of Your Ability to Work: A disability insurance policy stops paying you as soon as you resume working. However, a critical illness policy pays you regardless you return to work.
  • You can utilize this money for any purpose: In a policy for critical illness, the payment is done in lump-sum and is tax-free. Therefore, you can use this money for any purpose you want.

Best Critical Illness Insurance Plans in India

Check out some of the critical illness insurance plans from top health insurance companies in India 2018-

Insurance Provider Critical Illness Insurance Plan No of Diseases Covered Key Features Exclusions
Bharti AXA General Insurance Smart Health Critical Illness – Lump sum 20
  • Lump sum benefit up to Rs. 5 lakhs
  • Family option available
  • Tax benefit U/s 80 D
  • No-Claim-Bonus of 5%
  • Disease contracted in initial 60 days
  • Cataract surgery, laser treatment, hernia etc.
  • HIV/AIDS treatment
  • Dialysis required for chronic renal failure
Religare Assure 20
  • Rs. 3 lakhs to Rs. 1.20 crore sum assured
  • Zero-day survival period
  • Accidental death cover
  • Tax benefit
  • Lifelong renewability
  • Any pre-existing illness.
  • HIV/AIDS treatment
  • Congenital disease
  • Cosmetic & aesthetic and obesity-related treatment
  • Infertility and in vitro fertilization related tests and treatment
  • War, riot, strike, nuclear weapons induced hospitalization.
Max Bupa Health Insurance Criticare 20
  • Lifelong renewability
  • Lump sum payment or lump sum plus 10% of the sum insured payable each year for subsequent 5 years.
  • 3 lakhs -2 cr. of sum assured
  • Tax benefit U/s 80 D
  • 15 days free look period
  • Disease contracted in initial 90 days
  • AIDS, related syndromes & HIV
  • Failure to seek or follow Medical Advice
Reliance General Insurance Reliance Critical Illness 10
  • Sum Insured (Rs. 5 lakh, Rs. 7 lakh or Rs. 10 lakh)
  • Cancer Cover
  • Coma Quadriplegia cover
  • Tax benefit U/s 80 D
  • No-Claim-Bonus of 5%
  • Cashless claim & Reimbursement claim facility
  • Coverage for an end-stage renal disease requiring regular dialysis
  • Pre-existing diseases
  • HIV infection / AIDS
  • Critical illness in which death occurs within 30 days of the diagnosis or surgery
HDFC ERGO General Insurance Critical Illness Plan 8
  • Financial support for any lost income due to a decreasing ability to earn
  • Survival period of 30 days
  • Tax Benefit U/s80 D
  • Diseases contracted in initial 90 days
  • War and terrorist attacks
  • STDs, AIDS, venereal diseases
Critical Illness Silver Plan 1
  • Heart attack
  • Multiple sclerosis
  • Stroke
  • Cancer
  • Major organ transplantation
  • Coronary artery bypass surgery
  • Paralysis
  • Kidney failure
  • Tax Benefit U/s80 D
  • Survival period of 30 days
  • 90 days waiting period
  • Sexually transmitted diseases, AIDS or HIV
  • Any congenital conditions
  • Any pre-existing diseases
  • Nuclear, biological or chemical contamination (NBC)
  • Venereal disease
Critical Illness Platinum Plan
  • Includes above-mentioned diseases & additional covers
  • Aorta graft surgery
  • Primary pulmonary arterial hypertension
  • Heart valve replacement
  • Parkinson’s Disease
  • Alzheimer’s Disease
  • End-Stage Liver Disease
  • Benign Brain Tumor
  • Tax Benefit U/s 80 D
  • Survival period of 30 days
  • 90 days waiting period
  • Sexually Transmitted Diseases AIDS or HIV
  • Any congenital conditions
  • Any pre-existing condition
  • Nuclear, biological or chemical contamination (NBC)
  • Venereal disease
HDFC Life Cancer Care Silver 1
  • Lump sum payout on the diagnosis of early or major stage cancer
  • 7 days survival period
  • 25% of applicable sum insured (early stage of cancer)
  • Waiver of premium benefit
  • 100 early-stage cancer or CIS claims if any (in cases of major cancer)
  • A waiting period  of 180 days
  • Tax Benefit U/s 80 D
  • Entry age is 18 -25 years
  • Maturity age 28- 75 years
  • Sexually Transmitted Diseases AIDS or HIV
  • Any congenital conditions
  • Any pre-existing condition
  • Nuclear, biological or chemical contamination (NBC)
  • Cancer resulting from any of the conditions mentioned in exclusions
Cancer Care Gold 1
  • Sum Insured increases by 10% of initial sum insured each year
  • 7 days survival period
  • A waiting period  of 180 days
  • Tax Benefit U/s 80 D
  • Entry age is 18 -25 years
  • Maturity age 28- 75 years
  • Sexually transmitted diseases, AIDS or HIV
  • Any congenital conditions
  • Any pre-existing condition
  • Nuclear, biological or chemical contamination (NBC)
  • Cancer resulting from any of the conditions mentioned in exclusions
Cancer Care Platinum 1
  • Same as in gold plan plus additional benefits
  • A monthly income equivalent to 1% of applicable sum insured for a fixed period of next 5 policy years (on the diagnosis of specified diseases)
  • A waiting period of 180 days
  • Tax Benefit U/s80 D
  • Sum assured is minimum 10 lakhs up to 40 lakhs
  • Entry age is 18 -25 years
  • Maturity age 28- 75 years
  • Sexually transmitted diseases, AIDS or HIV
  • Any congenital conditions
  • Any pre-existing condition
  • Nuclear, biological or chemical contamination (NBC)
  • Cancer resulting from any of the conditions mentioned in exclusions
Apollo Munich Health Insurance Optima Vital 37
  • Tax Benefit U/s80 D
  • Age limit is 18-65 years
  • If both the parents are covered then the child can be covered from 18 up to 25 years
  • Tax Benefit U/s80 D
  • All illnesses & treatments within the first 90 days of the cover
  • Sexually transmitted diseases, AIDS or HIV
  • Pregnancy-related complications
  • Congenital diseases
PNB MetLife MetLife Major Illness Premium Back Cover 35
  • Return of premium if no claim is made during the policy term
  • Health protection for 10 years
  • 5% online discount
  • Tax benefits under Section 80C, 80D & 10(10)D
  • Minimum sum assured is Rs. 5 lakhs
  • Maximum Sum Assured Rs. 50 lakhs
CignaTTK Health Insurance Lifestyle Protection-Critical Care Insurance Plan
  • 30 in enhanced pan
  • 15 in basic
  • Lump sum or staggered claim payout options
  • 90 days of the waiting period
  • Annual health check up
  • Organ donor cover
  • Converted to comprehensive health plan after 4 years
  • Tax Benefit U/s80 D
  • Survival period of 30 days
  • AIDS or HIV
  • Genetic disorders
  • Mental disorders
  • Pregnancy complications
  • Pre-existing diseases
Edelweiss Tokio ET Criticare+ 17
  • Sum assured is from 5 lakhs to 1 cr. lump sum
  • Claim up to 3 times and get a waiver of premium
  • Tax benefits under Section 80D & 10(10)D
  • Coverage up to 70 years
  • Policy term is 5 to 30 years
  • Self-inflicted injuries
  • AIDS or HIV
  • STDs
  • Pre-existing diseases
AEGON Life iCancer 1
  • 150% of the sum assured in case of a critical stage of cancer
  • 100% of the sum assured in case of major stage of cancer
  • 25% of the sum assured in case of the minor stage of cancer
  • All types of cancer, except skin
  • Covers all stages of cancer
  • Tax Benefit U/s 80 D

Why Critical Illness insurance is important?

Usually, critical illness insurance comes handy for costly medical treatments that can otherwise wreak havoc with anybody’s bank balance.

Moreover, the premium amount of critical illness insurance is lesser than a comprehensive health insurance plan ‘s. Taking the example of a comprehensive health plan for a 35-year-old with a sum assured of Rs 6 lakh, its annual premium will cost around Rs. 6,500 per year. Whereas, critical illness for the same sum assured will cost somewhere around Rs 2,500 a year.

A critical illness policy provides coverage for specific situations, whereas a comprehensive health insurance covers a number of risks and for that reason, it is a lot expensive than the former, but nonetheless the scope of coverage is much higher in the comprehensive one. Critical Illness Insurance is a wise option if-

  • You do not have adequate savings to meet the medical costs for life-threatening or fatal diseases in future
  • If the health insurance policy by your employer does not provide employee benefit packages to cover a period of time off work due to critical illness.

Benefits of Critical Illness Insurance Plan

  • Income replacement: Critical illness not only affects a person physically but it also makes a financial dent. However, the policy pays a lump sum amount that is used to cover household and medical expenses.
  • You get tax benefits: The premiums paid for critical illness plan gets tax benefit under section 80D of Income Tax Act.
  • For peace of mind: The financial cover for critical illnesses gives you a peace of mind.
  • Treatment in foreign countries: Some insurance policies gives the option to get treatment in a foreign country.

Who Should Buy Critical Illness Insurance Policy?

The earning member of the family should consider taking a health insurance coverage for major illnesses, which can otherwise impose a financial burden on your other family members in case you are diagnosed with a critical illness. With the growing cases of chronic ailments including Cancer/Breast Cancer in women, Heart Attack Kidney Failure, Tumor etc., the need is constantly growing.

For instance, if we take into consideration the medical cost of cancer treatment in India, it can start from somewhere around 3 lakhs for 5-6 months of treatment and can range as high as Rs. 20 lakhs with targeted drugs and medicines.

Moreover, the cost of chemotherapy is somewhere around 1 lakh and your doctor can prescribe 6-7 chemotherapy sessions along with radiation treatment.

Similarly, coronary angioplasty is a costly affair as well. Just like many other people, if you do not want to grapple with the exorbitant healthcare treatment in India, then having critical illness insurance in India seems to be a feasible option.

You can easily compare health insurance plans in the critical illness comparison table online and choose the best critical illness policy that meets your health concerns. You can even use critical illness premium calculator to find the cost of a premium on a particular plan.

If you can relate to any of the below-mentioned situations, then you should definitely consider buying a Critical Illness Policy –

  • If your family history suggests critical illnesses

In most of the cases, critical illnesses happen due to genetic reasons. For instance, the risk of contracting heart ailments is higher, if your parents have health problems or if it runs in the family. It is recommended for you to have critical illness insurance, as you are at a higher risk than others.

  • If you are the main source of income in the family

If you are the primary source of income for your family, then it’s your responsibility to have yourself and your loved ones covered for any type of unanticipated critical illness in future. Your role is important, as other members of your family are dependent on your salary for personal needs and healthcare.

If something happens to you, the whole family will have to face the consequences of financial distress and emotional turmoil. There are special critical illness insurance policies for senior citizens also; you can buy them for your parents. And if you are already aware of your family’s medical history, then you should not give it a miss.  You probably make an ideal fit for such major illness insurance policies.

  • Those who are above the age of 40 Years

After turning 40, your body becomes more vulnerable to acute illnesses and it is highly recommended for you to have yourself covered with a critical illness insurance policy. You can even buy it at the age of 30 years rather than waiting for you to turn 40. In fact, many young age people are being diagnosed with a critical illness due to a sedentary lifestyle and hereditary reasons.

  • Those who work in a stressful environment

Working in an unhealthy atmosphere makes you more prone to life-threatening diseases. Even studies reveal that individuals who have high-pressure jobs succumb to critical illnesses at an early stage. Either you need to have work-life balance or you should protect yourself with a Critical Illness policy.

  • If you want to avail tax benefits along with health cover

As per the Indian Income Tax Act, 1961 critical illness insurance policies offer tax exemption benefits to the policyholder. You can avail a tax benefit of Rs 25,000 a year on health insurance, provided you are below 60 years of age.

If you are paying the premium for your elderly parents or senior citizens above the age of 60 years, then your tax benefit limit is capped at Rs. 30,000 under section 80D. A taxpayer below 60 years of age can, therefore, get a tax benefit of Rs 55,000 while paying the insurance premium for parents above 60 years of age.

Critical Illness Insurance Policy: Inclusions

You will get financial support for the following ailments in a Critical Illness Insurance Plan. The insurance coverages are broadly classified as mentioned below –

  • Open heart surgery or operation of heart valves
  • First heart-attack of specified severity
  • Cancer of pre-determined severity
  • Bone marrow transplant surgery or major organ replacement surgery
  • Permanent paralysis of both or any of the limbs
  • Persisting symptoms of motor neuron disease
  • Multiple sclerosis permanent symptoms
  • Coma of pre-determined severity
  • Kidney failure which requires regular dialysis treatment
  • Stroke causing permanent damage
  • The case of bacterial meningitis
  • The case of aplastic anemia
  • Liver disease at the last stage
  • Open chest CABG
  • Muscular dystrophy
  • Loss of speech
  • Hearing Impairment/Deafness
  • Lung disease at the last stage
  • Fulminant viral hepatitis
  • Major burns

The aforementioned list is not detailed but only for your reference. Various insurance companies provide even more coverages in their best health insurance policies for critical illness. It is advisable that you refer to your policy terms and conditions to ascertain the critical illness policy benefits and limitations in detail.

Critical Illness Insurance Policy: Inclusions

Not everything can be covered under your critical illness insurance. Even the best critical illness insurance policy in India will not process your claim under the following circumstances –

  • Any claim made for the treatment of a critical illness that is diagnosed within the first 3 months or 90 days from policy purchase
  • The sudden demise of the policyholder within 30 days of critical illness surgery or diagnosis
  • Treatment cost for hormone replacement
  • Any treatment which is taken overseas
  • Treatment for assist reproduction
  • Health risks arising due to consumption of tobacco, alcohol, drugs or smoking
  • Illness resulting from internal or external congenital disorder
  • Pregnancy or childbirth complications – abortion, cesarean and likewise
  • Treatment for HIV/AIDS
  • Any illness due to military or navy operation, war situations, terrorism, etc.
  • Any dental treatment or cosmetic surgery
  • Treatment for Infertility
  • Treatment did outside India
  • Critical illness will not provide personal accident cover

The aforementioned policies are as per the IRDA guidelines.

Things to Consider Before Buying Critical Illness Insurance Policy

Usually, it involves comparison based on the total sum assured, the sub-limits, premium cost, waiting period clause, to name a few. Confused about what parameters should you consider while purchasing a critical insurance policy? Don’t worry – we can help!

Let’s delve into some of the elements which you should definitely take into consideration-

  • Amount of Sum Insured

This is one of the most crucial factors to determine the insurance policy that works just right for you. While picking the best critical illness insurance in India, ascertain the amount of cover that you are getting. For the treatment of serious illnesses, the medical cost may vary. For example, the cost of treatment for stroke may be lesser than a kidney transplant. So, if you know in advance the coverage amount for the various treatments, then you can decide better. With the help of the critical illness insurance comparison table on our website, you can easily compare the amount assured and select the best critical illness policy for yourself and your family

  • Policy Coverages and Limitations

We have highlighted the standard coverage that is a part of the best critical illness insurance policies in India. But, at times, it may vary for certain specific plans. Do not just assume the benefits; rather, you should scrutinize all the benefits that you will get from your critical illness insurance policy.

There’s always a darker side to everything, so, it is advisable that you keep a list of critical illnesses or treatments for which your insurer will not reimburse you.

Suppose you are buying a specific policy that focuses on coronary heart diseases. The chances are it may not cover the treatment cost of cancer, brain tumor or a few other surgeries like cataract or a hernia. It is recommended to read your policy documents before purchasing it.

  • Coverage for Pre-existing Diseases

Some critical illness insurance plans provide coverage to almost every pre-existing disease once the waiting period is over. But, there are certain critical illness policies which do not cover pre-existing diseases at all. To avoid any such trouble in future, it’s advisable that you assess the coverage clause for pre-existing diseases well in advance.

  • In-built Coverages

Apart from financial support during crisis situations when one of your loved ones is diagnosed with an acute life-threatening disease, there are some health insurance companies which provide several built-in benefits as well. The perks include Personal Accident Cover, Emergency Cash Assistance, Complementary Medical Check-Ups, and Child Education Benefits among others.

  • Age of the Insured Person

Age is a vital factor; the insurance premium to cover the health risks of elderly people (above 50 years of age), who are more vulnerable to critical illnesses than someone who is in their early 20s or 30s, will be comparatively higher. Insurance companies provide comprehensive insurance to cover the health risks of old people. Simply put, higher the health risks due to age, the higher will be the premium.

  • Sub-Limits

It is the monetary cap that your insurance provider places on your health insurance claim. Sub-limits have direct repercussions on the amount that your insurance company will have to bear. For example – if during treatment or surgery, your actual bills shoot up to Rs 1.5 lakh and your critical illness insurance policy has a sub-limit of Rs. 80,000 for the specified treatment, in that case, you will need to shell out, money from your own pocket to pay the remaining amount. That is why it is very important for you to be aware of the sub-limit clause before taking a critical illness policy.

Procedure to Renew Critical Illness Insurance Policy

You can renew your critical illness policy either online or offline. The steps for both the processes are given below:

Steps to renew critical illness policy online:

  • Go to the website of the insurance provider and select option to renew the policy.
  • Enter the details of the policy.
  • The premium for renewal is generated after filling the details.
  • Make the payment and the renewal of your policy is done.

Note: You can call on the toll-free number of the insurance provider and renew the policy from there as well.

Steps to renew critical illness policy offline:

You can directly go to the nearest branch of health insurance provider and get your policy renewed from there. For this, you can either pay through cheque or cash. However, it is always advisable to pay via cheque for policy renewal. You can as well call your insurance agent and get your policy renewed via him. In this case, as well, paying through cheque is suggested.

Standalone Illness Insurance Policy or Illness Insurance Rider?

When it comes to deciding the sum assured, there is more flexibility in a standalone insurance policy. On the other hand, if you take a critical illness rider, the coverage amount of the base policy cannot be exceeded by the total benefit provided by the rider. For this reason, a standalone insurance policy is a more viable option for those who are looking for a higher sum assured. You get more coverage for critical ailments in a standalone critical illness policy in comparison to a critical illness rider plan. If you are still deciding on the one that you should go ahead with, then it’s advisable that you make a decision based on your health background and your particular needs in.

  • Maximum Age for Renewal

Everyone wants to be protected for the longest time possible. As you age, the expenses also mount up. The age limit criteria for health insurance renewal vary from one insurer to another. You will find that some critical illness policies offer lifelong cover and some provide cover up to a specified age only. To make an informed decision, awareness about the eligibility criteria can help you pick an adequate critical illness insurance plan.

  • Waiting Period Clause

There is a waiting period clause if you buy critical illness insurance in India. You will not get any claim until the waiting period has elapsed, and this is counted from the date of inception of the insurance policy.  It means, if you are diagnosed with any of the specified critical illnesses within this waiting period, you will not get the lump sum payment or reimbursement for the health treatment. In short, your claim request will not be processed. So, it is better to buy a critical illness policy that has a shorter waiting period.

List of 30 Critical Illnesses

  1. Cancer of specified severity.
  2. Kidney failure requiring regular dialysis.
  3. Multiple sclerosis with persisting symptoms.
  4. End Stage Liver Failure
  5. Benign brain tumor
  6. Cardiomyopathy
  7. End-stage lung Failure
  8. Brain surgery
  9. Open chest CABG
  10. Systemic lupus erythematosus
  11. Myocardial Infarction
  12. Good pasture’s syndrome
  13. COMA of specified severity
  14. Third Degree Burns
  15. Apallic syndrome
  16. Aplastic anemia
  17. Bacterial meningitis
  18. Multiple system atrophy
  19. Progressive scleroderma
  20. Major organ/bone marrow transplant
  21. Aorta graft surgery
  22. Open heart replacement or repair of a heart valve
  23. Pneumonectomy
  24. Motor neuron disease with permanent symptoms
  25. Stroke resulting in permanent symptoms
  26. Permanent paralysis of limbs
  27. Primary pulmonary hypertension
  28. Pulmonary artery graft surgery
  29. Primary Parkinson’s disease
  30. Alzheimer’s disease

Checklist for Choosing the Best Critical Illness Policy

To choose the best critical illness insurance in India, you need to closely analyze the below-mentioned parameters –

Insurance Parameters What Should You go Ahead With?
Sum Assured When deciding the sum assured, it’s better to go ahead with the policy that is offering 4 to 5 times more than  your annual earnings
Premium Cost Policies with lower premium can also offer better coverage
Waiting Period Shorter the waiting period duration, the sooner you will be able to get the claim
Specified Illnesses A policy with an extensive list of diseases that are covered are more beneficial
Age Renewability Criteria Choose the critical illness policy with the maximum age renewability criteria or lifelong renewability benefits

 Health Insurance vs. Critical Illness Insurance

Here’s a quick rundown of health insurance vs. critical illness insurance comparison table below for your better understanding –

Parameters  Critical Illness Insurance Health Insurance
Importance Provides coverage for life-threatening diseases like kidney failure, heart ailments, tumor, cancer etc. You are only reimbursed for the expenses up to the set limit, regardless of the disease
Advantages You are paid a lump sum amount, which can be utilized for the treatment. The insurance claim is processed based on the diagnosis report and hospitalization is not mandatory. Reimbursement for hospitalization expenses on submission of bills. Provision of the cashless facility at network hospitals.
Coverage/Inclusions Coverage extends to only 6-12 specified critical illnesses Extensive coverage of hospitalization compensation
Waiting Period The waiting period can extend up to 3 months The waiting period is usually around 30 days
Policy Term The duration ranged from 15-20 years. It requires renewal every year

How to File a Claim for Critical Illness Insurance Policy?

Whenever the need arises to file a critical illness insurance claim, register your request with your insurance provider. In most of the situations, you will require these documents –

  • Submit the claim form which is duly filled and signed by you or the policyholder
  • Photocopy of the insured person’s ID card
  • Medical certificate authenticating the diagnosis of the specified illness from the hospital or your health care provider (a doctor no less than MD/MS)
  • Medical check-up reports or documents reflecting the diagnosis of a critical illness
  • Original copy of the discharge summary in detail or summary of the daycare treatment from the hospital

Once you have submitted the aforementioned documents, the claiming team will scrutinize them to ensure their authenticity. You will receive written communication regarding the approval/disapproval or disbursal of the insurance claim.

Is There Any Waiting Period in Critical Illness Plan?

Yes, even critical illness plans have a waiting period, but it is comparatively shorter than the waiting period of comprehensive, individual, or family floater health insurance. Most of the policies for critical illness have a waiting period of 2 years to 4 years. So, before purchasing a critical illness plan, check its waiting period first.

Documents Required At the Time of Critical Illness Claim

  • Duly filled and signed the claim form
  • Medical certificate to confirm the diagnosis of the critical illness.
  • A certificate by the attending doctor confirming that the claim asked for is not related to any pre-existing injury or illness diagnosed in first 90 days of the inception of the insurance plan.
  • Death certificate/ Discharge summary from the medical center (hospital), if applicable.
  • Investigation reports affirming the diagnosis of the critical illness.
  • The first letter of consultation and further prescriptions.
  • All the specific documents related to the critical illness.
  • Bill of pharmacy with the prescription.
  • All other documents needed by the insurance company.

Critical Illness Cancellation Procedure

You can cancel your critical illness policy however you have to follow certain conditions to get the refunds. You can cancel your critical illness policy anytime but can get the refund only if you have not made any claims during that policy year. You can either cancel your health insurance policy either during the free-look period or anytime after that. So, on that basis, we can divide the cancellation process into two categories:

  • Cancellation During Free-Look Period: Every insurance company provides free-look period to its customers. It is a 15-30 days period after getting the policy documents. During this time, you can ask for the cancellation of the policy. For this, you need to write to your insurance provider regarding the cancellation of the policy. The insurer refunds the premium after deducting the stamp duty charges and risk charges for the days you have been assured.
  • Canceling the Policy Anytime After the Free-Look Period: The insurance company refunds some amount of the premiums paid in this case as well. However, to get the refund, you must have not made any claim during the policy term. Different critical illness plans have different rules to provide a refund in this case, but the generic figure that most of the health insurance providers offer during 1st policy year are:
Period of Risk Premium Refunded
Up to 1 month 75% of the annual premiums paid
Up to 3 months 50% of the annual premiums paid
Up to 6 months 25% of the annual premiums paid
Exceeding 6 months up to 365 days NIL

Note: An insurance provider can also cancel the critical illness policy on the basis of fraud, misrepresentation, or non-disclosure of some necessary facts or because of non-cooperation by giving 30 days notice period.

How to Calculate Premium of Critical Illness Policy?

The premium of critical illness policy depends upon various factors and hence this is the reason two people of the same age and same financial status pay different premiums for their critical illness policy. These factors are:

  • Family Medical History: If your family’s medical history is poor or your family members have a history of high blood pressure, cancer, or other critical illness, the premium of your policy will be higher than the one whose family does not have such medical problems.
  • Pre-existing illness: For pre-existing illnesses, you will have to check with your insurance provider whether they cover them or not. If they do, they for sure charge you higher premium amount.
  • If you have ever consumed tobacco in the past or currently consume it: Studies show that people who consume tobacco have a higher risk of critical illnesses as cancer. This is the reason tobacco consumption affects the premium.
  • Age: Another significant factor affecting the premium of a critical illness plan.
  • Gender: Gender also affects the premium.
  • Work profile: If you are the one who is exposed to hazardous substances, radiation, etc. in your work or have a job that involves a high risk of injury, then the premium of your critical illness health insurance policy can be high. Apart from that if you have a sitting job or if your job involves less activity, then as well the premium can be high.
  • Location: If you are living in an area that has frequent climate issues or that area has low access to healthy eatables, you will be charged with more premium.
  • BMI: People who have high Body Mass Index have a high risk of having heart issues, arthritis, diabetes, and other health issues. Therefore, for such issues, the premiums are quite high.

Note:  All the policy terms and documents are subjected to the criteria laid down by your insurance company.

Critical Illness Insurance FAQs

Q1 What is critical illness insurance?

Critical Illness insurance is a policy that pays a lump sum amount to the insured person upon diagnoses of any critical illness like, kidney failure, cancer, heart attack, etc. as listed in the insurance plan.

Q2. How is premium calculated for critical illness insurance?

The cost of the premium for critical illness insurance is calculated on the basis of sum assured, policy term, and gender and health condition of the policyholder. It varies from one illness insurance plan to another, based on these factors. And varies from one insurer to another.

Q3. How many times can I make claim in a critical illness policy?

You are only permissible to make claim once during the policy period. Once the payment is made in a lump sum amount, for the specified critical illness, the insurance policy will be expired soon after the claim.  If only one member is insured, it will need to be renewed and if more than one individual is insured, the policy will remain in force for other insured members.

The payment is usually made after the survival period. It is recommended that you check with your insurance provider as there are some health insurance companies which may allow making claim more than one during the policy period.

Q4. Should I buy critical illness plan even if I have a health insurance policy?

Your health insurance policy will reimburse your hospitalization expenses. But it won’t pay off your expenses on treatment of critical illness. In the event of such medical emergencies, a critical illness insurance policy comes handy. The insurer will pay you a lump sum amount to help you meet the exorbitant cost of treatment.

You buy it as rider or add-on in your existing health insurance policy. But a standalone policy will offer comprehensive coverage against such illnesses.

Q5. Is there any pre-medical test required before purchasing a Critical Illness Insurance Policy?

Usually, pre-medical check-ups are required before buying a critical illness insurance plan. It varies based on the type of plan, age, and the amount of sum insured.

Q6. I have a good health insurance plan from my employer. Do I need to buy a critical illness insurance plan?

Even comprehensive health insurance plans do no cover all the expenses incurred on the treatment of critical illnesses. Almost all the policies have deductibles and a co-payment clause. Treatment in non-network hospitals also may not be covered.

Q7. Is it possible to make multiple claims for the same illness?

Once claimed and the payment is made by the insurer, a critical illness insurance policy get terminated. If it is a family-floater policy the coverage will continue for the remaining members.

Q8: What are the eligibility criteria to purchase this kind of insurance plan?

Any individual within the age group of 5 years to 45 years. Children between the age group of 5 years to 18 years are covered in the critical illness plan if both the parents are as well insured in the policy.

Q9: Specify the critical diseases that are covered in most of the critical illness plans?

The following critical diseases are covered in most of the critical illness plans:

  • Heart attack
  • Stroke
  • Coronary artery bypass surgery
  • Major organ transplants
  • Kidney failure
  • Cancer
  • Paralysis
  • Multiple Sclerosis