With the soaring cost of availing healthcare facilities, having a comprehensive insurance cover that helps account for the financial burden is becoming increasingly crucial. This is because patients with critical illnesses are required to monitor their condition closely and may require multiple hospitalizations during their treatment. This continuous treatment and associated care is linked to a huge financial dent, especially when individuals are unprepared for such situations.
In this regard, having comprehensive insurance coverage like critical illness coverage can help individuals protect their savings and avail of the necessary treatment without constantly being worried about the expense. Typically, a critical illness cover is an insurance designed to offer financial protection to the insured in case they are diagnosed with a critical disease covered under the plan during the insurance term.
To elaborate, the cover helps account for medical emergencies, let’s explore its features and benefits.
Why should one get a critical illness cover?
Critical illness cover pays a lump sum amount to the insured to help them cover their high cost of treatment and related medical expenses. Typically, the benefit is paid as a lump sum amount which the insured or their family members can use to cover for the medical expenses during emergencies or otherwise. The lump sum helps cover charges related to doctor consultations, surgery charges, cost of medicine, and treatment charges. It may also cover pre and post-hospitalization charges and room rent based on the plan’s scope and coverage.
This financial help not only helps account for medical costs but also allows the family to meet outstanding liabilities to ensure their financial burden does not get worse during the hardship. In other words, the money may help serve as a temporary substitute for the insured’s income which may have been compromised during their illness.
Medical emergencies are unpredictable and this is why most people are unprepared to handle it. Those without any provision for medical emergencies are often financially hit the worst and the entire burden falls on their family. While those with employed or financially independent family members can tide over the situation others have to dip into their savings to access funds. This strains their finances and dents their provision for child education or retirement. However, comprehensive critical cover can help meet the costs without straining the budget or draining the savings.
Besides these financial support, critical illness cover extends tax benefits to the insured. Critical illness insurance is a type of health insurance, which makes it entitled to tax deduction under Section 80D of the Indian Income Tax Act, 1961.
For instance, individuals can claim a maximum of Rs. 25000 under Section 80D for themselves and their families. Notably, they can raise a claim of Rs. 50000 if the insured is 60 or above and Rs. 25000 for their parents. On the other hand, if the insured is a senior citizen they can claim up to Rs. 50000 for their parents. You can get a deduction of up to 25000 under Section 80D for yourself and your family ( 50000 if age of the insured is 60 years or above) and up to 25000 ( 50000 if the age of the insured is 60 years or above) for your parents
Key Features of Critical Illness Insurance
These are some of the key features of critical illness coverage that make it different from the rest of the insurance –
- Lump sum payment
Once the insured gets diagnosed with a critical illness covered under the policy the insurer disburses a lump sum payment to the policyholder. This sum helps them to account for the cost of treatment and also allows the insured to make up for the loss of income during the period of diagnosis. However, it is advised to read the fine print on sum disbursal to gain a better understanding of the process and plan it accordingly.
- Monthly income
When an individual is diagnosed with a critical illness a part of the policy sum assured to them may be paid to substitute for their monthly salary. This feature may vary among policies and the flexibility of the same may be based on an individual’s need or financial standing. Typically, individuals may decide if they want to receive a monthly payout or the money as a lump sum payment.
- Coverage
Typically, critical illness coverage offers wide coverage to the policy buyer. They include wide critical Illnesses and related costs for the treatment. This helps policyholders and their family members to focus more on the treatment than on arranging funds or dealing with the repercussions of the expenses.
- Hassle-free digital experience
Today, potential policyholders can get critical illness coverage based on their coverage needs online. By completing basic formalities, individuals can easily browse, compare, and apply for policies online. They may choose to check the official website or app of different policyholders or simply use the Bima Sugam app to explore policies in one place. Existing policyholders can also renew their insurance, pay premiums, and raise claims through online platforms. This feature makes the policy easy to manage and simple to access during an emergency.
It should be noted that an insurance policy is bound by several terms and conditions that highlight its scope and limitations. Individuals must check the terms and also clauses related to the claim settlement ratio to understand them clearly and proceed with their policy to make the most of it during an emergency.
How much critical illness coverage would you need?
An individual diagnosed with a critical illness often needs long-term treatment, regular follow-ups, and significant breaks. All these could hamper their income and savings.
This is why individuals seeking a critical illness cover must opt for a comprehensive cover. To determine the suitable amount they must weigh the duration of treatment they would need to undergo and the average cost of the treatment and related expenses.
To break it down they should consider these
- Medical expenses over the recovery phase
- Treatment cost
- Cost of medicine and required support
- Diagnostics cost
- Doctor’s fee
- Nursing fee
- Surgery cost, if required
- Family’s monthly expenses
- Ongoing financial liabilities
Having an insight into these will help estimate the approximate cost and help get a plan accordingly. Individuals may use a critical insurance calculator to understand the required coverage and accompany premiums to understand whether the combination suits them or not.