Factors to consider when buying critical illness insurance

In today’s world, critical illnesses such as heart disease, cancer, and kidney failure are becoming more common, affecting people from all backgrounds. These serious health issues can be life-threatening and leave lasting effects on the body. Beyond health challenges, a major concern for many individuals is the financial burden that comes with critical illnesses.

Often, people are unable to work due to their condition, leading to income loss while their medical expenses continue to rise. Costs for treatments, medicines, doctor visits, and necessary home modifications, such as adding wheelchair ramps or oxygen support, can add up quickly. Unfortunately, regular health insurance doesn't always cover these costs.

This is where critical illness insurance comes into play. It provides financial support in the form of a lump sum payout, helping individuals manage medical bills, lifestyle changes, and income loss. But before purchasing a policy, there are several important factors to keep in mind. This blog will explain everything you need to know to make an informed decision.

What Is Critical Illness Insurance?

It is a type of insurance policy that gives you a lump sum payment if you're diagnosed with a serious illness listed in your policy. This money can be used for medical expenses, long-term treatments, or even to buy necessary medical equipment.

For those who are the main earners in their families, critical illness policy becomes even more vital. The payout can help replace lost income and cover everyday expenses like loan repayments, household bills, and children's education. You can also use it for travelling abroad if you need specialised medical treatment.

Which Illnesses Get Covered?

The illnesses covered under critical illness policy can vary depending on the insurer, but most policies tend to include a range of serious health conditions. Commonly covered illnesses include:

> Cancer (depending on its severity as defined in the policy)

> Kidney failure requiring regular dialysis

> Multiple Sclerosis with ongoing symptoms

> Coronary Artery Bypass Grafting (CABG) surgery

> Major organ transplants, such as liver or heart transplants

> Bone marrow transplants

> Permanent paralysis of the limbs

> Heart valve repair/replacement surgeries

> First heart attack (depending on its severity)

> Stroke resulting in permanent symptoms

It's essential to understand which conditions are typically covered, as this can greatly influence your financial security in times of medical need. 

Key Factors to Consider

When considering purchasing such insurance, it’s important to evaluate various factors to ensure the policy meets your needs. Here are the key points to think about:

1) Number of Illnesses Covered
Different policies cover varying numbers of critical illnesses. Some might cover a broad range, while others are more limited. Carefully review the list of illnesses included to ensure it meets your needs.

2) Coverage Duration
Critical illness insurance is typically not lifelong. Most plans provide protection for a specific time period, either up to a certain age or for a fixed term. Make sure you know how long the policy term lasts before committing to a critical illness cover.

3) Survival Period Requirement
Most critical illness policies require you to survive for a specified period, often between 15 and 30 days, after diagnosis to receive the benefit. Be sure to understand this clause in your policy.

4) Waiting Period
A waiting period, typically between 90 and 180 days, is standard in most critical illness plans. This is the period immediately after purchasing the policy during which claims cannot be made. Check the waiting period in your plan to avoid surprises.

5) Sum Assured
The sum assured should be sufficient to cover your anticipated medical expenses. Choose a coverage amount that offers financial protection without being overwhelming in terms of premium costs.

6) Exclusions
It’s vital to be aware of what is not covered by the policy. Common exclusions include self-inflicted injuries, conditions arising from substance abuse, congenital diseases, and injuries resulting from high-risk activities. Always read the exclusions carefully.

7) Claim Process and Settlement
The claim process should be simple and transparent, especially during stressful times. Additionally, check the insurer's claim settlement ratio to gauge their reliability in processing claims efficiently.

8) Renewability Options
Many policies offer fixed-term coverage, so it’s important to verify if the plan allows for lifelong renewability. This ensures continuous protection as you age, when the risk of critical illness increases.

9) Pre-existing Health Conditions
Your current health status can influence premium rates and eligibility. Some plans may require a medical check-up, while others may impose restrictions based on pre-existing conditions.

10) Affordability of Premiums
While you want comprehensive coverage, ensure the premiums are affordable in the long run. Balancing coverage with what you can comfortably pay is key to selecting the right plan.

11) Lost Income Coverage
Some plans may also provide compensation for lost income during your recovery from a critical illness. Look for this feature if maintaining financial stability during illness is a concern.

12) Inclusions and Additional Benefits
Aside from covering medical costs, check if the policy includes benefits like hospitalisation, post-hospitalization expenses, and coverage for ancillary costs related to recovery.

13) Limitations and Sub-limits
Understand any sub-limits, waiting periods, or other limitations, such as restrictions on specific treatments. These can impact the extent of your coverage.

By carefully considering these factors, you can make an informed decision that provides the right level of protection for you and your family.

Eligibility 

Eligibility requirements can also vary from one insurance company to another. However, there are some common guidelines that most providers follow:

Age Limits
Most insurance companies allow people between 18 and 65 years old to buy this insurance. However, the exact age range can be different for each provider, so it’s a good idea to check with the insurer.

No Serious Health Issues
While some plans may cover existing health conditions after a waiting period, it’s usually easier for people without major health problems to get coverage.

Ability to Pay the Premiums
You’ll need to be financially able to pay for the policy’s premiums. This is important because this requires long-term payments, so you must be able to afford it over time.

Willingness to Take a Medical Test
Some insurers may ask you to take a medical test to check your health before they give you a plan. This helps them understand how healthy you are and the risks involved.

By familiarizing yourself with these eligibility criteria, you can better prepare for the application process and make informed decisions about your insurance coverage.

Additional Benefits

Beyond covering medical expenses, critical illness insurance provides a range of additional benefits that can significantly enhance your financial stability during challenging times. Here are some key advantages:

> Income Replacement: If you are the primary breadwinner, the insurance payout can help replace your lost income, allowing your family to manage essential living expenses.

> Medical Travel Costs: The insurance payout can also be used to cover the cost of travelling abroad if you need specialized medical treatment not available in your home country.

> Lifestyle Adjustments: The lump sum can help you make necessary adjustments to your home, such as installing wheelchair access or buying medical equipment.

> Debt Management: The insurance payout can be used to pay off loans or other financial obligations, reducing stress on you and your family.

These additional benefits make critical illness insurance a valuable tool in safeguarding not just your health but also your overall financial well-being.

Why is it Important?

While health insurance is essential, it doesn't always cover everything. Critical illnesses come with many additional costs, from treatments to long-term recovery expenses, that your regular health insurance might not cover. Critical disease insurance fills that gap by providing financial protection when you need it the most.

For example, someone diagnosed with a serious illness like cancer or a heart condition may need expensive surgeries, treatments, and medications. It ensures that even in such difficult times, you and your family can remain financially secure.

Bottomline

Critical illness insurance is a valuable safety net, especially in today’s world where serious illnesses are becoming more common. It offers a lump sum payout that can help cover medical bills, replace lost income, and make necessary lifestyle adjustments when faced with a life-threatening illness.

When choosing a policy, make sure to consider factors like the number of illnesses covered, policy duration, survival period, waiting period, and exclusions. Taking the time to understand these details will help you choose the best policy for your needs.

Ultimately, it provides not only financial protection but also peace of mind, allowing you and your family to focus on recovery without worrying about mounting medical bills or income loss.

So, take the first step today and explore your options with OneAssure. Your family’s future is worth it!