How to select a sufficient sum insured under your critical illness insurance cover?

Critical illness is like an uninvited guest with evil intentions that can hugely impact both wealth and health, affecting your lifestyle and impairing your earning ability. With unhealthy and stressful eating habits, a rise can be observed in the number of people affected by critical illnesses such as cancer, cardiovascular diseases, diabetes, heart diseases, and more. For example, according to the National Cancer Registry Programme Report, Cancer cases in the country are likely to rise by 12% by 2025^[1], with 1.39 million cases recorded in 2020.

If you look atcardiovascular diseases worldwide, India has one of the highest burdens of cardiovascular disease (CVD). Also, the annual number of deaths from CVD in India was projected to rise from 2.26 million (1990) to 4.77 million (2020). Also, the coronary heart disease prevalence rates in India were estimated over the past several years and have risen from 1.6% to 7.7% in May and June 2021, respectively.

Most people assume that a standard health insurance policy protects them. But a typical health insurance policy may not cover critical illnesses. Critical illness insurance offers extra coverage for diseases like cancer and heart strokes or attacks, because the related emergencies or illnesses often include medical expenses significantly higher than those of the average medical conditions. *

* Standard T&C Apply

Let’s check out the benefits of opting for a critical illness insurance policy.

Benefits of Critical illness insurance policy

Wide range

A critical illness affects the person physically; it affects the finances of the individual and their family. Critical illness insurance pays a lump sum amount to cover medical expenses. For instance, Bajaj Allianz General Insurance Company encompasses a wide range of illnesseswithinitial and advanced stages included in their policies. Customers have the freedom to structure some aspects of the policiesas per their requirements. *

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Tax Benefits

The policyholder can avail of tax benefits under the Income Tax Act, 1961. In addition, the policyholder can avail of tax benefits under Section 80D of the Income Tax Act, 1961. Senior citizens can avail of tax benefits up to Rs. 20,000. *

*Tax benefit is subject to change in tax laws

Payment in Instalments

If the policyholder cannot pay the insurance premium amount in one go,they have an instalment option,via which they can make payments of smaller values in spaced-out intervals.*

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Multiple Sum Insured Sections

Bajaj Allianz General Insurance Company’s Criti Care Policy provides benefits and discounts, including wellness discounts, sensory care, online discounts, long-term policy discounts, and many more. Itis a benefit-only policy.It pays a lump sum amount to the customers upon diagnosisof a listed ailment. The sum insured under each section ranges from ₹1 lakh to ₹50 lakh. The maximum total sum insured by the policy is Rs. 2 crore.*

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The five sections/plans under the policy are – Cancer Care, Cardiovascular Care, Kidney Care, Neuro Care, Transplants Care & Sensory Organ Care. Each sectionhas a specific list of ailments, bifurcated as ‘Category A’, which comprises initial stage ailments, and ‘Category B’ for advanced stage ailments. If the claim falls under Category A, the customer is eligible for 25% of the sum assured of that section and for a claim under Category B, 100% sum assured of the section is payable. *

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How to select a sufficient sum insured under your critical illness insurance cover?

The purpose of a critical illness cover is paying for expensive treatments. For instance, a comprehensive health plan for a 30-year-old with a sum insured of Rs 5 lakh can cost around Rs 6,000 a year. On the other hand, a critical illness policy can cost Rs 1,500 a year with the same cover.*

The lump sum that you get can be used for various purposes, such as to pay for expensive treatments or recuperation aids, making up for the loss of income due to an inability to earn or pay off debts. Both these plans provide benefits in different ways.

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Which critical insurance plan should you opt for?

Critical illness covers are fixed benefit plans. One gets the total sum insured irrespective of whether one is hospitalised or not for the treatment expenses. However, details vary among plans. For instance, most programs have a survival period clause,which requires the insured to survive for at least 30 days after being diagnosed with any critical illness to file the claim. *

The number of critical illnesses covered also varies according to the plan and the insurer offering it.

The built-in coverage also differs from policy to policy. Some may insure accidental death and partial or total disability due to accidents, while some may not. *

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Conclusion

One should evaluate and compare a few different plans to decide which suits one the best. Consider the list of illnesses covered, the cover amount, the claim procedure, and the payment history of the insurer.

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

Source: [1] https://www.southasiamonitor.org/india/cancer-cases-india-rise-12-2025-says-official-report#:~:text=According%20to%20the%20report%2C%20India,58%20hospital%2Dbased%20Cancer%20Registries.