16 Oct, 2021 | Health Insurance

What does a Critical Illness Insurance plan cover?

Team Beshak
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Any serious illness or disease which requires immediate medical treatment can be termed as a Critical Illness. Some examples of critical illnesses are- Cancer, Kidney failure, Heart attack, Illnesses leading to coma or paralysis, and so on. 

A critical illness can happen to anyone at any point in life, and will most likely involve a high cost of hospitalization for treatment and recovery. And, this can happen despite making every effort to stay fit, adopting a healthy diet, and getting regular exercise. While on one side, you will have to go through prolonged treatments, surgeries and make long-term changes to your everyday life - on the other, you’ll have to deal with the monetary implications of getting a disease. 

If you do not want to put your and your family’s financial stability in jeopardy, then you should consider purchasing Critical Illness Insurance. Let’s take a quick look into the importance of Critical Illness Insurance and some of its benefits. 

What happens when you get a Critical Illness? 

You’d have heard about situations where young individuals are forced to quit their well-paying jobs after a major disease such as cancer, as most of their time is now spent on receiving treatment. Now put yourself in that person’s shoes and imagine the financial strain they and their family would go through during such tough times. 

Truth be told, in purely monetary terms, a serious disease could cost your family even more than death itself. There is a loss of income - this is known. But in addition, there is also the burden of long-term care (physiotherapy, appointing a nurse, doctor visits, costly long-term medication, etc.) - especially those expenses that are not paid for by your health insurance. Further, there might be major expenses to modify the house to fit your needs - like building a ramp, putting up support bars, etc. All this costs money, and all this is not paid for, by your health insurance plan

Taken together, all this indicates that these are expenses that you will end up bearing out of your pocket - from your savings. And, you’ll end up compromising your family’s financial comfort, in the process. 

What does the Critical Illness Insurance policy cover? 

A critical illness cover pays your family a lump sum amount of money if you get any of the serious diseases listed in the policy document. You can use this money to make up for the lost income during your illness and recovery, as well as fund your additional expenses that your health insurance will not pay for that we discussed above. 

Every policy provides you with a list of critical illnesses it covers - and often, these lists across insurers look different from each other. Some give a broad cover (for example they could simply cover, ‘Cancer’), while some provide specific details of the type of the disease (Blood cancer stage 3 or 4, advanced Lymphoma stages 3 or 4, etc.). So, a long list of illnesses doesn’t essentially mean a better cover. 

In fact, we spoke to a seasoned actuary about the significance of the number of illnesses and learned that the top 6 diseases account for more than 90% of critical illness claims. Further, when you look beyond the top 10 diseases listed in any plan - the claims are rare. This means that a majority of these ‘comprehensive’ covers are often puffed up with rare medical conditions.

Generally, insurers do this so they can charge hefty premiums for covering an impressive list of illnesses. As mentioned above, you should consider the likelihood of these conditions occurring, and not worry too much about the very rare conditions. 

Remember - as long as the most commonly occurring serious diseases such as stroke, heart disease, cancer, kidney disease, paralysis, lung disease, etc. are covered- you should be sorted. The additional list is only a bonus! 

Which Critical illnesses are not covered? 

Next, remember that every critical illness insurance plan also provides a critical illness list that mentions all the conditions it won’t cover as - exclusions. You should refer to the policy document, to get the detailed list of such exclusions applicable to your policy. 

Here are some examples of exclusions. 

  • Illnesses as a result of self-injury or attempts of suicide
  • Conditions caused by ionizing radiation or contamination by radioactivity from nuclear fuel 
  • Congenital external diseases, defects, or anomalies
  • Medical conditions occurring as a result of substance abuse, use of illegal drugs, narcotics (unless prescribed by a medical practitioner), intoxicants, alcohol, hallucinogens, etc.

The bottom line is that you shouldn’t get swayed by the number of illnesses alone - and should get a deeper view into what is actually covered (the inclusions), and what might not be covered (exclusions), in the plan you’re looking at. 

Doing deeper research on everything you need for a critical illness cover - so you can make a final decision with confidence? We’ve got the perfect resource for you! 

Download - The Most Definitive Guide To Critical Illness Insurance

Got specific questions related to critical illness insurance that you want expert responses to? Post them on the Beshak Insurance Forum, and get answers within 6-8 hours!

Key takeaways
  1. Getting diagnosed with a critical illness could cost your family even more than your death.
  2. The cost of curing a critical disease is very high - not only will you lose your earnings, but you will also see a rise in other medical expenses that your health insurance will not pay for.
  3. A critical illness plan will pay you a lump sum amount that can be used to replace your lost income and support your long-term medical needs, without compromising on your family’s lifestyle or dreams. 
  4. Every policy comes with a list of diseases covered, but this list could be misleading. So, do not get swayed by the number of illnesses covered alone.
  5. Instead, carefully analyze the list of inclusions and exclusions to arrive at a policy that covers all the important conditions you want protection against.
Team Beshak
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Team Beshak, We breathe insurance :)

We are a group of young members of the Beshak community. We come together to brainstorm, write relevant and useful content for people (just like us) who want to figure insurance on their own. If you too want to share inputs/write for us - send us a "hey" to info@beshak.org

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