Medical insurance: You should buy a critical illness cover; here is why

Indians are at an increasing risk from life-style related diseases. There are many who suffer from diseases like cardiovascular illness and cancer, and that too, at a young age. How can you protect yourself financially against these ailments? By having a Critical Illness (CI) plan or a rider that comes with your life and health insurance policies.

In case you already have a medical insurance policy (either an individual or a family floater policy), then you may consider adding a CI rider to the existing plan or you may buy it separately. Let’s understand in detail. How does a CI policy/rider work A CI rider or plan is different than your regular health insurance plan. Under this the health insurance company will pay a lumpsum money, which is your sum insured in case you suffer from any serious illness, say cancer or heart attack.

That lumpsum money will take care of the cost of medical expenses and you can even pay off loans, if you have taken due to the medical emergency. This policy is different from your regular health insurance plan where you get the claim based on your hospital bill, subject to the restrictions and conditions of your medical policy.

In a CI plan, irrespective of your medical expenses, the insurance company will pay you the entire sum insured as per your policy. What does a CI policy cover Most of the common ailments like heart attack, cancer, stroke, kidney failure or paralysis etc are covered under any CI rider or policy.

Each company has its own separate list of critical illness, which may or may not be similar. Hence, one must always read the list of illnesses covered by a particular company before buying any policy.

CI policy v/s CI rider

Once you decide to protect yourself against critical illness, you must choose between the options of a new standalone CI policy or a CI rider that comes with your regular health or term life insurance plan. A rider will be available at a much-reduced cost and will offer similar benefits like a standalone policy.

You need to be aware of the restrictions and flexibility that come with a rider in terms of increasing your sum assured etc. So, if affordability is not a restraint, then you should go for a standalone CI policy. Importance of a CI rider or a policy A critical illness can knock on your door without any warning and you could end up losing your entire savings for the treatment of the ailment.

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Hence, it is advisable to have a plan that provides you a critical illness benefit, especially if you are around 40 years or above. Though buying a CI plan is important, it can never replace a regular comprehensive health insurance policy. Hence, a CI policy should be bought only once you have sufficient health insurance cover for yourself and your family members. 

By: Rishabh Parakh

(The writer is chief gardener, Money Plant Consultancy) 

Source: DNA Money