Should you opt Critical Illness Coverage in health insurance?

Critical Illness Coverage Insurance IndiaOne day you woke up and was not feeling well. You visited the hospital and diagnosed with a critical illness. You realized at that time that your health insurance does not have Critical Illness Cover. What would be your reaction? You could be a earning member. While you would lose all your hard earned savings for health care treatment, there is financial loss that you are not earning any more. Many of us do not pay attention to Critical Illness Coverage in India until we really need them. What is critical illness cover in India? What are its advantages and major exclusions? Should you really opt for Critical Illness Coverage in health insurance?

What is Critical Illness Coverage in India?

Critical Illness Cover is a rider, which comes with your health insurance plan. However, it comes with an additional premium. It provides the insured a lump sum amount in case of diagnosis of critical illness and also takes care of health care costs for such treatment. This critical illness includes Cancer, Heart Attack, Coma, etc. Many of us just ignore such critical benefit offered by health insurance companies.

Also Read: Best Health insurance plans for Parents and Seniors

Advantages of Critical Illness Coverage in India

There are several advantages of critical illness cover in health insurance. Major ones are indicated below.

1) Lump sum benefit: If you are diagnosed with pre-specified critical illness indicated in your health insurance plan, the insurance company would pay you lump sum benefit as indicated in the plan. This is to compensate the financial loss.

2) Cost of treatment: Critical illness coverage would help you to take care of all costs related to the treatment of such critical illness. Since such diseases would cost you very high, you may lose all your hard earned money to take care of treatment. Critical illness benefit would help you to overcome this.

3) Increased coverage for no claim bonus: You may not be diagnosed for any critical illness for several years. Critical illness plans would help you to increase insurance coverage year on year if there is no claim as no claim bonus. Such no claim bonus can be benefitted for maximum of 10 years.

4) Tax benefit u/s 80D: Like any other health insurance plan, you would get tax income tax benefit u/s 80D.

What are the major exclusions of Critical Illness Coverage?

There are a few exclusions which you should keep in your mind before opting for any critical illness benefit in health insurance plans. However these may vary from one insurance company to another. 

  • Pre-existing diseases may not cover
  • You cannot claim if death occurs within 30 days from the diagnosis of such critical illness.
  • Critical illness coverage does not cover HIV/AIDS
  • Critical illness due to intake of drugs, tobacco, alcohol and smoking are not covered
  • Claims diagnosed within 30 days from the policy date are not covered.

What are the major Critical Illnesses?

  • Cancer
  • Kidney failure
  • Paralysis
  • Pulmonary arterial hypertension
  • Coma
  • Major burns
  • Aorta Graft Surgery
  • Organ transplantation etc.,

How much critical illness coverage you may need?

It depends on your age, lifestyle, income, etc. An individual who has high income and living in luxurious lifestyle need to go for a higher critical illness amount as it would impact his way of living if he or she diagnosed with any major critical illness. 

Also Read: Star Cardiac Care offers unique health insurance plan for Heart Patients

How to choose best critical illness plan?

There are several companies offering critical illness cover like ICICI Lombard, Max Bupa, Apollo Munich, Bajaj Allianz, HDFC Ergo, etc. It is very hard to say which is best as each of them would have their unique features which may fit specific individual's lifestyle. Hence, review these policies and choose the best critical illness plan suitable to you. There are several health insurance comparision sites like policybazaar, policyboss, sastapolicy etc. which can help you to compare the available plans and choose the right plan.

Conclusion:  Critical illness coverage is important factor which one needs to consider while taking health insurance plan. While you may incur additional premiums, it is worth spending such money to cover for any major critical illness. I am in the process of reviewing my health insurance plans to check this in coming days.

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Critical Illness Coverage in health insurance

Suresh KP


  • feroz

    i have 3 company critical illness cover
    mux bumpa – 20 ,
    bharat axa – 20
    cigna ttk – 30

    in case any heart surgery cost 5 lakhs i claim for all 3 company claim accept or not?

  • Neha kushwaha

    Hi Suresh Sir,

    My childhood friend who suffered from epilsey from almost 20 years,So any health  insurance company having this disease claim.So that i can help it out with some ways.

    Because of her family is also sufffering.So sir is there any health insurance who has the epilsey disease claim.




  • Mohit

    Truly speaking, I feel that opting Health insurance is just a waste of money rather one should invest in some other areas on annually basis on the name of Health insurance. For young people, premium cost too low but that time, one never faces any sort of disease; accident is an exception. Problems start after one crosses 40 & premium charges are sky touching & if one decides to opt for critical illness, the cost is double of the actual.

    Again, most of the people have 2 children now a days with 1 wife (Hahahaha); now, if you are going to opt for Health insurance, you should cover your family because anyone can have any disease. If you are opting for critical illness, you should opt for a coverage of 7 lakhs or minimum of 5 lakhs.

    I am taking an example of a male of 50-55 years & a female of 45-50 years with 2 children under 20 years of age. For 1 year, one need to pay the premium of around 35K; for daily expenses, it's around 5K & for critical illness, it's around again something around 35K (only adults are covered), net premium comes out to be around 75K for 1st year & if you don't make a claim, you will get 10% NCB.

    One of my friend's father (~78 years) got a problem in heart (can't remember the disease name) & overall expenses was around 4.5 lakhs; similarly, another person's father (Above 70) developed some sort of cancer in 2012 & they have to move Delhi for treatement & again, 6 times chemotherepy was recommended as some sort of Cyst was present after treatement. Overall expenses was around 2 lakhs for treatement + 25K/therapy; overall, the cost was 3.5 lakhs + travelling expenses (which is not covered in Health insurance plan) + medicines.

    My point here is, whom who will leave in your family, if you are going to opt for Health insurance. Again, as you move ahead in life, premium increases rapidily. Health insurance doesn't cover travelling expenses, accomodation for family members, medicines after recovery, loss in income due to missing the office (You will miss your office/business, if anyone in family gets critical illness). Again, such sort of illness occur once in several years.

    A few years back, I was also wiling to take health insurance but later felt that I should keep the money in FD on the name of Health insurance for my family & a part for my parents as my brothers are also contributing for the same. Since, last few years, none in my family ever suffered from any disease, so all the premiums that would had been wasted is present in our account & that amount is huge.

    Having your own money is better than insurance; atleast you are self-independent & don't need to call the customer care numbers, when someone in your family needs to move to hospital. Again, there is atleast one great government hospitals in every state of India, basically present in capital city; they are better than all the private hospitals; one should have a good connection there, either with the doctors or the administrative people. This will eliminate the need for the health insurance. Last year, my mother had a minor Ear operation (Single day hospitalization); cost was around 600 rupees only, inclusive of medicines; again, RCT of 4 teeths was around 2,000, inclusive of all things (none insurance company in India provides dental insurance); due to some reasons, I had to get CT Scan of my brain (nothing was there), cost was 1K where private people were charging 6K-7K.

    What's your opinion about my home-made health insurance plan??

    • Hi Mohit, I agree to some of your points. However let us not conclude that we may get diseases at older age and we may not require. What happens if we met with accident ? What happens if a young age person gets high cost disease ?  All these needs to be considered. 

      • Mohit

        Accident is only unavoidable but it's a very rare case that Young people under 30 or 35 gets any high cost disease. This could be the reason, why premium for people under 25 years is only 2K-3K per year but if a person had celebrated more number of birthdays, the premium touches to 60K-70K per annum (for 80+).

        I will recommend one thing, eat well, sleep well, exercise regularly; sometimes use public transport instead of car for going to office & don't depend solely on your servants, do some of the tasks of your home, bring items from market (Walking only); play some outdoor games with your kids & try to remain stress free, none of the dangerous disease can touch you whether the same is diabetes or heart related problems.

  • Amit

    Good info. Insurance is often a prodcut ignored by youngsters.Awareness is also missing for critical insurance cover. So this is definitely very helpful

  • Nithin

    Hi Suresh,

    Very thoughtful article, thanks for writing it up. With so many insurance plans in the company, I think you should help us with an article on how to chose the best one… rather, what are the consirations one need to take when buying a healh insurance.

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