If you’ve recently decided to give yourself and your family the added protection of a critical illness insurance policy, you’ve made the right decision.
A critical illness plan helps safeguard your income if you become sick. It acts as an income replacement plan and can be used to cover any costs not borne by your health insurance policy.
While you should feel assured that your policy will protect you if you’re diagnosed with a critical illness, it’s very important to familiarize yourself with the terms and conditions.
It’s easy to skip the fine print with the assumption that you’ll never have to use the policy, but this can lead to hassles if you do need to make a claim at some point.
Here are some of the most important conditions you should understand in a critical illness policy:
Number and types of diseases covered
Every critical illness policy will vary in the number of diseases covered and the nature of those ailments.
Most critical illness plans cover common non-communicable diseases or procedures such as kidney failure, kidney transplant, stroke, cancer, coronary artery bypass graft (CABG) and other types of cardiac surgery.
Diseases that are less common, such as aplastic anaemia or motor neurone disease, may also be covered.
But if you look at the breakdown of diseases covered, you’ll see the fine print may exclude certain procedures or ailments:
- Angioplasty, a common procedure to open blocked arteries after a heart attack
- Non-invasive or pre-malignant tumours or carcinomas
- Autoimmune diseases such as lupus
- Sexually transmitted diseases such as HIV/AIDS
Additionally, many critical illness insurance plans exclude treatments or procedures that are still considered to be experimental (such as stem cell transplants), or that are considered cosmetic or non-essential in nature.
For policies that allow you to make multiple claims (if you’re diagnosed with another critical illness or need another procedure), the second claim may not be accepted if it is a similar disease or procedure.
Once you sign on the dotted line, the policy becomes effective from a certain date, known as the date of issue.
However, your insurer will invoke a waiting period. This is the length of time that must elapse before you are diagnosed with a critical illness. For example, if the waiting period is 90 days from the date of issue and you’re diagnosed within the first 60 days, your claim will not be accepted.
The waiting period may be even longer for critical illnesses arising from pre-existing health conditions. The period of time during which these health conditions first appeared will also be considered when determining the waiting period.
Many critical illness insurance policies offer a lump sum payout upon diagnosis, meaning you don’t have to wait until the disease progresses to receive the sum assured.
However, to claim the sum assured, insurers require the person insured to survive for a certain period from the date of diagnosis. This is known as the survival period.
If the insured is confirmed as diagnosed with a critical illness and dies within two weeks, the sum assured will not be disbursed.
Under normal circumstances, a critical illness insurance plan will be terminated upon receiving a lump sum payout equal to the sum assured.
However, some insurers allow you to make more than one claim – sometimes up to three claims – before the policy is terminated, provided the conditions are not related. For such policies, such as Edelweiss Tokio Life – CritiCare+, a standard waiting period applies between claims.
The final word
Critical illness insurance plans cover the most common diseases affecting Indians, such as complications from diabetes, cardiac ailments and cancer. A critical illness policy helps you recover financially so you can focus on recovering physically. It’s part of a well-rounded financial plan.
Like any financial policy, it’s crucial to read the fine print in policy documents carefully and consult your insurer for clarity.