Critical Illness Cover and Need to Consider it for Buying

Unfortunately, if any of our family members are suffering from life threatening illnesses then it becomes emotionally tough and unlike the other minor ailments, the treatment of such specific diseases could be a financial burden.

With increase in risk of falling prey to life-style diseases, Critical Illness Policy provides financial protection to the policyholder in the form of cash Payouts on diagnosis of major illness like Cancer, Multiple Sclerosis, End stage Kidney disease etc.

List of critical illnesses covered under the policy varies from insurer to insurer; most insurers cover 8 to 20 major critical illnesses.

On occurrence of any of the illness covered under the policy, company provides the lump sum amount to cover the costs incurred for the treatment which is useful to reduce the financial burden on the insured member.

Critical Illness Policy provides a fixed lump sum amount equal to the sum insured, on the diagnosis of any of the pre-specified critical illnesses regardless of your hospital expenses.

Therefore it is a defined-benefit plan as the pay-out is defined and fixed for any hardships and monetary losses which are caused due to critical illnesses.

A critical illness cover can be taken either as a standalone policy from any general insurance company/Standalone health insurance company or as a rider with life insurance policy.

However, if taken with life insurance company the rider’s sum assured is restricted to the specific percent of the sum assured of base plan thus the flexibility to choose a high cover for critical illness may be lost.

That may not be the case for if critical illness cover is taken form a general insurance company. It should be noted that being a defined-benefit plan, the critical illness policy will not reimburse hospitalization cost.


Critical Illness is also available as Add On with base health indemnity policies. The number of Critical illnesses covers may vary from product to product and requires attention while making purchase decisions.

For making claim under critical illness policy, the medical certificate from treating specialist medical physician, mentioning the details of diagnosis with duration of the illness, is required to be submitted along with the discharge card, investigation reports justifying the nature of illness.

Insured must provide intimation to Insurer immediately through various modes like email/telephone/fax/in person or may be via letter or any other suitable mode and within 30 days of the aforesaid Illness/condition/surgical event, Insured need to submit documents like, Identity proof, Dully filled Claim form, Copy of Hospital summary/Discharge card/treatment advise/medical reference, Copy of Medical reports/records, Copy of Investigation reports, Doctor’s certificate & Any other relevant document as requested by the Insurer for the processing of Critical Illness Claim.

Also Read : Which is the best Critical Insurance Policy – Life Insurance Critical Illness rider or General Insurance Critical illnesses benefit policy/add on?

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