Here is a guide to assist you in doing your homework for obtaining an appropriate Critical Illness plan for yourself.
What is Critical Illness cover?
As the name suggests, Critical Illness plans cover you for only certain specific critical illnesses that are pre-defined as being covered under the plan. The insured is paid the Sum Assured as a lump sum amount within a few days of a critical illnesses being diagnosed. Once this lump sum is paid, the plan ceases to exist.
Things to look for in a Critical Illness Cover?
1- How much coverage do I really need?
2- How many Critical Illness Conditions Covered under the plan?
3- Critical Illnesses with Coverage Continuation Option
4- Availability of Additional Riders
5- Standalone policy or Top-up
6- Option to increase the Sum Insured
How much coverage do I really need?
A simple rule-of-thumb is approximately 2 to 3 times of your income plus any outstanding debts or loans. For example if Rajesh is earning 7 lacs per annum with no loan or liability, he should have to buy 14 – 21 lacs cover.
How many Critical Illness Conditions Covered under the plan?
It is important to think about the illnesses which are being covered by the critical illness insurance cover you are looking at. You shouldn’t get a policy simply because it is cheap, study the kinds of conditions they handle as well as the a lot of small specifics that you could think about before accepting it. It is also crucial that you ensure you do not go for a plan that covers lots of conditions that are not likely to affect you.
Basic plans offer coverage for heart attack, cancer, and stroke. More advanced plans may offer additional conditions. But we would suggest you to buy a critical insurance plan, which covers maximum disease.
Critical Illnesses with Coverage Continuation Option
Normal critical illness policy cease to exist after critical illness claim is made. So select a critical illness plan where the policy have a coverage continuation option for other or selected diseases, because if you go to the market at that time to buy a new critical illness, it will be not avialable or available at very high cost.
E.g. in ICICI Pru Life’s Crisis Cover – If Ramesh had taken a Critical Illness cover with a Sum Assured of Rs. 15 lakhs and he is diagnosed with Parkinson’s Disease, what will be the benefit amount? Parkinson’s Disease falls under Group 2, wherein the maximum amount payable is Rs. 10 lakhs. Therefore, you will receive Rs. 10 lakhs and policy will be continued for the balance Rs. 5 lakhs with reduced premiums, covering the remaining 34 illnesses, total permanent disability and death.
Availability of Additional Riders
Check if the additional riders available with the critical illness policy e.g. – Death Benefit (DB) and Total & Permanent Disability Benefit (TPDB), if yes take them.
What is covered under these riders?
Death Benefit Rider – In the unfortunate event of death during the policy term, the Sum Assured will be paid to your nominee.
Total & Permanent Disability Benefit Rider – Full Sum Assured will be paid in case you suffer from Total & Permanent Disability (TPD).
Standalone policy or Rider?
Currently the Critical Illness policies available as a Rider to life insurance or Health insurance policy or as a Standalone policy. The difference between a critical illness as a rider and a combined life and critical illness plan is that when a claim is made from the first, the life insurance policy will still be effective. For the latter, once a critical illness claim is made, the life insurance cover also terminates. But generally in a Critical Illness rider – the no. of critical disease covered are very less (around 5 – 6).
Option to increase the Sum Insured
The Critical Insurance plan should have an option to increase/top-up the sum insured at later point in life when his liabilities have increased.