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Critical Illness Insurance

Critical Illness Insurance is a unique type of Insurance product, where an individual is covered for a specific list of life-threatening diseases as per the company was chosen. Under this policy if the insured gets diagnosed of any of the critical illness (covered by the company) after issuing the policy, then the total amount of sum assured will be paid to individual/nominee and the policy will get terminated.

Case Study:

Mr X is 30 years old. He is the sole bread earner of his family. He earns INR 40000 per month. Her sister Miss Y got married recently and all her family savings got spent in it leaving them with no backup. One fateful day he sees the doctor as part of regular health check-up and gets diagnosed with Cancer. But, thankfully he on his friend’s advice took Critical Illness Insurance for a sum assured ofRs 25 lac, 6 months ago. Thus, if the claim proves to be a genuine one then the company will pay the individual amount inn lump sum even if the hospitalisation cost is less

WHAT ARE FEATURES OF CRITICAL ILLNESS POLICY?

    • Pre-existing diseases are not covered by most of the companies. Although, few companies do cover pre-existing diseases at the time of taking policy. Thus, it is important to take maximum sum assured, as once the disease is diagnosed no other company/same company will issue you a new policy
    • Critical Illness may also result in loss of income/ change in lifestyle as such diseases require expensive treatment. And, the amount provided by Insurance company gives financial relief to family
    • Normally, No claim bonus is not given in Critical illness Insurance but few companies offer the same
    • Premium of Critical Illness Insurance is subject to change as per company rules. Normally, most companies offer fixed premium for a span of 5 years and may change according to age. But, few companies change it every year
    • Critical Illness Insurance can be taken as rider or a standalone plan along with any life insurance policy
    • We recommend you to buy it as standalone policy because it has more flexibility than if taken as a rider. If you will combine it with life insurance as rider then less number of diseases will be covered and this will be only applicable till tenure of life insurance plan




  • Critical Illness Insurance is highly recommended for those who do not have sufficient medical emergency fund available. As the expenses could be more than 10 Lac
  • The premium cost for Critical Illness Insurance will be less as compared to Traditional policy
  • These plans are offered by general insurance company and life insurance company as well as standalone health insurances companies
  • Premium under this policy is not refundable
  • There are few companies that offer critical illness hospitalisation in abroad also
  • This can be used as an add-on policy
  • It is a one- time benefit policy as after diagnosis comp will pay the sum assured but will not renew it further

HOW CRITICAL ILLNESS INSURANCE IS DIFFERENT FROM TRADITIONAL INSURANCE?

POINTS CRITICAL ILLNESS INSURANCE TRADITIONAL INSURANCE
TYPE Can be taken by an individual only Can be taken as Individual or Family Floater policy
RENEWAL After                                disease is diagnosed no renewals are done Can be renewed
AMOUNT PAID At the time of diagnosis of any covered critical illness On time of hospitalisation of more than 24 hours
SURVIVAL PERIOD 30 days survival period is mandatory No survival period
SUPPLEMENT OR STAND ALONE POLICY Can be used as a supplement product for specific diseases, along with main policy Can be used for only hospitalisation expenses
WAITING PERIOD 90 days waiting period 30 days waiting period
TERMINATION Policy gets terminated after diagnosis of first Critical Illness Policy continues even after hospitalisation occurs

WHAT IS THE ELIGIBILITY CRITERIA FOR TAKING CRITICAL ILLNESS INSURANCE?

  • Critical Illness Insurance can be taken between 18-65 years
  • Individual can choose Sum assured which starts from 1 lac and   goes up to 1 Crore
  • Critical illness Insurance Premium is paid annually
  • Critical Illness Insurance can be renewed till one is alive but there are few companies which terminate the policy in the 70s
  • No medical test is required up to 45 yrs of age for basic sum assured
  • Critical illness Insurance is portable in nature

WHAT ARE THE EXCLUSIONS OF CRITICAL ILLNESS INSURANCE?

  • Treatment within the first 90 days of taking the cover
  • Pre-existing condition may or may not be covered depending on the waiting period clause of the Insurance Company



  • Any critical illness in presence of HIV infection and / or any AIDS
  • Occupational diseases
  • Intentional self-injury and/or the use or misuse of intoxicating drugs and/or alcohol.

WHAT IS THE LIST OF CRITICAL ILLNESSES COVERED?

  • Alzheimer’s Disease
  • Aorta Graft Surgery
  • Apallic syndrome
  • Aplastic Anemia
  • Bacterial Meningitis
  • Benign Brain Tumour [resulting in permanent neurological symptoms]-
  • Blindness
  • Brain Surgery
  • Cancer of Specified Severity
  • Cardiomyopathy
  • COMA of Specified Severity
  • Creutzfeldt-Jakob Disease (CJD)
  • Deafness
  • Encephalitis
  • End Stage Liver Disease of Specified Severity
  • End Stage Lung Disease
  • First Heart Attack of Specified Severity
  • Good Pasture’s Syndrome
  • Kidney Failure requiring regular dialysis
  • Major Burns
  • Major Head Trauma
  • Open Chest CABG
  • Major Organ/Bone Marrow Transplant
  • Multiple Sclerosis with Persisting Symptoms
  • Motor Neuron Disease with Permanent Symptoms
  • Multiple System Atrophy
  • Open Heart Replacement or Repair of Heart Valve
  • Permanent Paralysis of Limbs
  • Pneumonectomy
  • Primary Parkinson’s Disease
  • Primary Pulmonary Arterial Hypertension
  • Progressive Scleroderma
  • Progressive Supranuclear Palsy
  • Pulmonary Artery Graft Surgery
  • Stroke resulting in Permanent Symptoms
  • Systemic Lupus Erythematosis
  • Total Loss of Speech

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