What is Critical Illness Insurance Plan
Life is full of uncertainties. Apart from the risk of death, there is a risk of illness too. Certain diseases like cancer, stroke, and lung disease are life-threatening and may result in loss of income due to disability or severity of the disease. Treatment for such critical illnesses requires a lot of money, which can cause an imbalance in your savings and financial setup. Critical Illness Insurance plans provide lumpsum fixed benefits in the event the person is diagnosed with any of the critical illnesses listed in the critical illness insurance policy. It is a fixed benefit health plan which pays out a lumpsum amount.
What kinds of Critical Illness Plans can I opt from?
Critical Plans can be opted as
1. Critical Illness Plan as a Stand Alone Plan
Critical Illness plan is available as a stand-alone individual policy offering critical illness benefits as a fixed payout depending upon the chosen Sum Assured in the diagnosis of a critical illness. Stand-alone plans cover a vast list of critical illnesses, varying from insurer to insurer. For a stand-alone critical illness plan, the sum assured can be taken as per your requirement and budget.
2. Critical Illness Plan as an Add-on or Rider
Protection against critical illness can also be taken as an add-on cover or as a rider along with the basic health insurance plan. Critical Illness rider will have restricted sum assured subject to the maximum base health insurance policy sum assured and cannot exceed the same. As an Add with the standard health plan, the number of critical illnesses covered is limited and not exhaustive.
What are the Benefits of Buying a Critical Illness Insurance Plan?
The benefits under the Critical Illness health plan are as follows:
Critical Illness Fixed Benefit
In the event of the insured being diagnosed with the listed Critical Illness in the plan, they are entitled to get the full Sum Assured under the policy irrespective of whether being hospitalized or not. There may be a loss of income because of the illness, so the lump sum amount paid by the insurer can be used for numerous purposes by the insured, such as: primarily to get the treatment for the illness, for recuperation purposes like buying recuperation utilities, to pay off any loans or debts, to manage household expenses, etc.
Tax Benefit
The Premium paid for the critical illness plan is applicable for a tax benefit under section 80D of the Income Tax Act,1961. These benefits are subject to changes in tax laws.