​Today, when the cost of living is almost sky rocketing, bearing the cost of healthcare is also not easy. Therefore, to ensure that inflationary rates do not affect yours and your family’s health conditions, it is very important for to opt for good health coverage.
 
Health insurance is the tool to cover high medical expenses on unexpected medical emergencies.  A comprehensive health insurance plan covers a wide range of risks and is therefore significantly expensive. However, many health insurance plans put a cap on the expenses incurred towards certain types of life threatening health problems- commonly referred as critical illnesses.
 
Therefore, in order to deal with the affects of critical illnesses, an innovative medical product- Critical Illness Insurance - was launched under in Oct 6, 1983, the name “Dread Disease Insurance” in South Africa. This insurance policy covered four major critical conditions - Heart-Attack, Cancer, Stroke and Coronary Artery By-Pass Surgery.
 
The concept of this product spread rapidly throughout the world. Moreover, with time other critical illness conditions were also added to the initial list. Depending on the customers’ needs, critical illness covers differ from one market to another. Some of the critical illnesses which are usually covered under such a policy are Heart-attack, Cancer, Strokes, Multiple Sclerosis, Kidney Failure, Major Organ Transplant, Paralysis etc.  
 
Critical illness Insurance pays a lump sum benefit if insured suffers a critical condition/ illness listed in the insurance policy. Such a plan covers only specific conditions/ illnesses thus it is far cheaper than a comprehensive health plan.
 
Acute illness can also mean loss of income, total or partial disability and change in lifestyle. The financial burden could be far more than what an indemnity health plan (which pays hospital bills) would cover. Buying a critical illness plan is the best way to get over these shortcomings.
 
While a health policy covers hospitalization, a critical illness plan pays a lump sum on diagnosis of serious ailments listed in the policy document.
 
The lump sum that you get can be used for various purposes such as to pay for expensive treatments or recuperation aids, make up for loss of income due to fall in the ability to earn or pay off debts. Both these plans provide benefits in different ways.
 
This policy may require the policy holder to survive a minimum numbers of days from when the illness was first diagnosed. The survival period varies from company to company; however, the survival period normally used in Indian insurance companies is 30 days.
 
Critical illness plans are sold by both life insurance and general insurance companies. Life insurance companies offer this plan with longer tenure (normally up to 40-50 years) while general insurance companies offers this plan with comparatively smaller tenure (1-5 years).
 
One should evaluate and compare a few different plans to decide which suits their needs the best. Consider the arising health costs, age factor and list of illness covered by companies, the cover amount, claim procedure and the payment history of the insurer etc.


Critical Illness Insurance is growing form of health insurance. A combination of comprehensive health insurance and critical illness cover can give a good balance between pricing and coverage. A critical illness plan is a supplement to your health insurance portfolio.
 
Article by Navin Kumar