Twitter
Advertisement

Why critical illness insurance is key

The best component is that it takes care of all the expenses ranging from tests to treatments, and post-treatment care

Latest News
article-main
FacebookTwitterWhatsappLinkedin

Mumbai-based Prateek was struggling with the emotional and financial challenges of his father’s angioplasty treatment when he got another blow. He was himself diagnosed with kidney cancer. The combined bill for treating both was around Rs 10lakh.  Unfortunately, the costs for therapies and surgeries in the same fiscal year exhausted the annual limit of Rs 5 lakh of his health cover. He had no choice but to rely on his savings for other expenses. 

A recent survey shows that four out of 10 Indians purchase a health cover of Rs 5 lakh. But, as Prateek’s incident shows, even Rs 5 lakh would be insufficient when you are up against critical illness. The occurrence of such illnesses and costs of treatment have risen stridently in recent years. A stable financial situation may not protect you from the aftershocks.

Non-communicable diseases (NCD) are now the primary cause of death in the country, contributing to 60% of deaths. In addition, four diseases namely heart disease, cancer, diabetes, and chronic pulmonary diseases contribute nearly 80% of all deaths due to NCDs. If that is not dreadful enough, healthcare inflation in India is projected to be nearly 15%.

The positive news is that such illnesses can be cured or brought under control with appropriate and timely treatment. But all this demands a huge cost. As for Prateek, while the expenditure for his treatment was taken care of by the health cover, he had to pay for his father’s treatment expenses along with travel, accommodation, medicines, follow-up consultations and check-ups for both. Prateek had to also quit his job as he was advised complete bed rest. 

In such a scenario, a life insurance critical illness cover would have been most suitable for Prateek and his family because it provides a lump sum amount, unlike a traditional health insurance policy.

Critical illness insurance offered by life insurance companies gives the insured a lump sum amount in case he or she gets diagnosed with a critical illness. The best component is that it takes care of all the expenses ranging from tests to treatments, and post-treatment care. While an indemnity plan only pays for the actual hospitalisation costs incurred, daily cash or fixed cash benefits pay a pre-defined fixed amount basis the number of days of hospitalization. This is irrespective of the expenses one incurs and complements an indemnity policy. The additional amount of daily or fixed cash can be used for paying expenses not covered under mediclaim or indemnity plans. It also covers other miscellaneous expenses such as loss of income, leave without pay, minor hospitalization bills, medicines, etc. 

Who should purchase such a policy and why?

Critical illness plans are fixed benefit plans. For instance, a critical illness plan of Rs.5 lakhs covering heart disease would pay Rs.5 lakhs in one go if the insured is diagnosed with a heart ailment. Such plans are simple, easy to understand and cost-effective. Anyone who is looking to cover most diseases that can potentially impact the key organs of the human body like heart, kidneys, liver, brain, lungs, etc. and life-threatening diseases like cancer, should opt for critical illness plans. 

The writer is chief distribution officer at Aditya Birla Sun Life Insurance

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement