Most young and healthy people baulk at the idea of buying a critical illness policy. If you are one of them, this article is for you.
I’m healthy, why do I need it?
Your good health today should be a matter of pride for you. However, do you have a way to predict what the future may bring? We hate to play devil’s advocate, but there is always a chance that one may develop a serious illness which is detected too late. Recently, there have been rising incidents of relatively young people with no history of heart ailments succumbing to sudden strokes and heart attacks. So if you are healthy today, there really is no guarantee that you may continue to be healthy in the future.
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If you develop a critical illness…
• Treating a serious disease is not only physically and mentally taxing, but financially burdensome too.
• Even if you have the best medical insurance policy that is comprehensive in every aspect, you might still fall short of funds when treating end stage kidney or heart disease, or even cancer.
• Medical treatment, diagnostic and hospitalisation costs are already quite high in India. The costs of treating critical illnesses is exponentially higher.
• You cannot divert all your income, money from savings and investments, towards treating the illness. You still have a house to run, bills to pay, children to educate, your spouse’s and your own retirement to plan, etc.
• You might delay or defer treatment for lack of funds. This might lead to a faster progression of the disease, and the doctor might find it difficult to contain it at a later stage.
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But if you have a critical illness insurance policy…
* You are covered for up to 30 critical illnesses and may get coverage up to Rs 25 crore, based on the plan and the insurance provider you buy it from. Generally, the coverage is offered up to at least 10 times your annual income. This is a large umbrella in terms of coverage and sum assured, so you can avail of the latest treatment using the best technology and medication.
* You get coverage for treatments that your standard medical insurance policy will not cover. In the absence of critical illness insurance, you would have to fund the expensive treatment out of your pocket.
* You receive the sum insured as a lump sum pay-out upon diagnosis of the (listed) critical illness. This is why it is a benefit-based policy, in that you don’t need to file a claim after hospitalisation and treatment, such as is seen with a standard health insurance plan. However, some plans also pay the sum insured in a staggered manner. For example, you can choose a staggered or phased pay-out, in which you are paid 25% of the sum insured upon diagnosis, the balance 75% in 60 months on a monthly basis, and an additional 10% pay-out. But do check if your health insurance provider offers this facility.
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* You do not need to pay high premiums to avail of the critical illness insurance. The best health insurance providers in India offer affordable coverage under these plans, along with a range of benefits.
* You can get discounts for choosing a certain premium payment mode. For example, certain leading health insurance providers have these plans with a single premium mode benefit – you get a discount of 7.5% on the premium for 2 years, and a straight 10% for 3 years. This is a big saving for you.
* You are covered even in your later years with the critical illness insurance. The entry age is 18 years while the maximum age is 65 years. It is believed that the chances of developing critical illnesses are higher as one ages, so this is a useful factor.
* You get tax benefits against the premiums paid for this policy under Sec 80D of the Income Tax Act, 1961.
After considering the points above, why would you not buy a critical illness plan for yourself? It helps to play it safe and prepare for the worst health eventuality – and we pray that you never have to use this plan. But having it in your kitty gives peace of mind.
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