Medical health insurance: Must you buy a critical illness insurance policy?

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With medical treatment getting increasingly expensive, it is crucial to purchase a critical illness insurance policy. The policy might be taken either as a rider with a life insurance or medical health insurance policy or might be purchased as a standalone policy.

Insurance firms cover around three dozen critical illnesses reminiscent of cancer, kidney failure, major organ transplant, etc. On diagnosis of any of the listed critical illnesses, the insurance company can pay the total sum insured which is able to cover the associated fee of the particular treatment. Because the policyholder will suffer lack of income due to the critical illness, the pay-out will help him pay for the treatment costs, support his family financially and compensate for the lack of income immediately. Alternatively, a medical health insurance plan is an indemnity plan which pays the expenses (cashless or reimbursement) actually incurred.

You’ve to be mindful that critical illness insurance policies have a waiting period starting from 30 to 90 days. So, should you are already affected by a critical illness, then you definitely is not going to give you the chance to buy the policy. Nevertheless, you should buy the policy even should you are affected by certain lifestyle disorders reminiscent of high blood sugar, blood pressure which increases the danger of critical ailments. Policyholders get tax advantage of as much as Rs 25,000 under Section 80 D of the Income Tax Act. Insurers provide a free look period of 15 days ranging from the date of receipt of the critical illness policy document.

Why buy?

If you’ve got a family history of diseases reminiscent of cancer, coronary artery bypass, etc., or has lifestyle diseases reminiscent of diabetes, it is best to purchase an adequate critical illness cover at a reasonable premium. The sum insured should depend upon the age, income and site. Typically, critical illness treatments are long-drawn. So, the sum insured should cover the prices of hospitalisation, medicines, and support the family’s monthly expenses in case you’ve got to stop working to recuperate. Also, long-term financial liabilities reminiscent of loans, children’s education ought to be factored in.

Ideally, the sum insured ought to be the annual income of the insured multiplied by the variety of years one might have to get better. Before finalising, read the terms and conditions and the list of exclusions. Select the policy which has a high age limit of renewal to maximise the advantages.

Standalone or rider?

Ideally, one should purchase it as a standalone policy as there shall be a limit on the sum insured in a rider, which shall be similar to the bottom policy. Nevertheless, the premium shall be higher in a standalone policy as compared with a rider.

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