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Is Critical Illness cover needed?

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06 Apr, 2021 by  Clinton Fernandes

Considering health insurance now covers the same things as a critical illness cover (except for Parkinsons/Alzheimers), what is the point in buying an expensive CI cover (if the money can be used to increase health insurance cover?)


I understand what CI does and how it works, but i do not agree to the crowd which says you need both a health insurance and a critical illness cover (even if the health cover is more than enough). Could you please offer your view on this? Is it really worth it?


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The purpose of critical illness insurance is not properly understood in India. The propose is not really to defray the medical expenses incurred, for which there is health insurance. There are top up plans available for higher limits for covering cost of treatment of critical illnesses, if base plans are inadequate.


The real propose of CI insurance is to help the insured manage life style changes following a CI event. For instance, the patient may require assisted living support upon discharge or may face other sudden financial needs due to his indisposition, all of which may not be covered under health insurance.


CI insurance is therefore supposed to come into play after the illness and not to support the treatment per se. For the above reason a survival period of one or two months used to part of CI insurance, but this has now been diluted and some players have started giving without survival period making its distinction with health insurance blurred.


Hope this helps.


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07 Apr, 2021
Clinton Fernandes
Thank you for your answer. So CI is useful for for second-order effects. Assisted living support is also a valid reason. But do u think it is apt that a financially stable person shell out Rs15,000-20,000 annually for a CI policy if he has more than adequate health insurance and super top up?
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As regards the “worth” of CI insurance products in Indian market, personally I feel they are not well evolved compared to international market. The definition of critical illness as laid down by IRDA which all insurers follow is a bit restrictive. The illnesses need to have certain thresholds. Cancer has to have a certain severity/malignancy for it to be treated as a CI. These must be carefully understood.

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Personally, I am not a great fan of standalone CI insurance due to the high premiums involved. May be a better option could be to explore CI as a rider to Term Insurance. Probably the life insurance experts in this forum can comment better on that.

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08 Apr, 2021

Dear Clinton

My compliment to input of Mr Hari .

Let me give another perspective .

When some one falls critically ill then there are two financial loss

  1. Cost of treatment which is reimbursed by Health Insurance
  2. Loss of income due to absence from work , how does one compensate that . If you have critical illness insurance then a lump sum amount is paid to compensate the loss of income .

Besides above , there are three reasons to take critical illness insurance

  1. Critical illness is fixed benefit and not indemnity like health insurance.
  2. Health insurance has lot of restriction on alternate therapy but critical illness is paid irrespective of treatment . Claim will be given even if patient decide not to be treated .
  3. Critical illness also gives you opportunity for international treatment . Amount is paid on diagnosis and not treatment .

I recommend critical illness to be an integral part of all . Better to take as rider alongwith term policy . Will be pleased to offer any clarification


Shailesh ,

Co founder

Insurance Samadhan



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