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5 factors to consider before
buying critical illness cover
Vivek Sharma
Financial Planner and Trainer
Diagnosis of critical illnesses is a life changing event which
has far reaching consequences for both an individual and
the persons dependent on him as critical illness can disrupt
dreams and wipe out savings. The most effective solution to
overcome challenges arising from critical illness is to buy
critical illness health insurance policy. The objective of these
policies is to provide lump sum money on diagnosis of the
specified critical illness. While it is important to buy critical
illness policy, it is equally important to check the features of
such policies.
Here are five critical factors that you need to look into before buying critical
illness cover:
Diseases Covered: Check out for diseases covered under the policy. Insurance
companies do not cover all critical diseases under the cover. For example Max Bupa critical
illness cover has 20 diseases covered while HDFC Ergo critical illness policy covers only 8
diseases. While there may be difference in the premium because of this, what is important
is what you are looking for in a critical illness policy.
Exclusions: While it is important to understand what is covered under critical illness policy,
it is equally important to know are the exclusions under the policy. Also read the exclusions
very carefully i.e. how are they worded. For example, HDFC Ergo policy document says,
We must be informed of any event or occurrence that may give rise to a claim under this
policy within 14 days of diagnosis of first occurrence of the Critical Illness. Such details
are available under policy document only and you must read this.
Claim Process: Claim process is very important as critical illness generally involves a
payment of huge amount. Some of the health insurance plans have cashless facility while
some others do not offer this. Max Bupa critical illness explicitly mentions that , No
cashless facility will be available for the benefits of this product. All claims will be adjudicated
after the occurrence of the event and further submission of documents by the Insured
Person. Benefits will be paid out in line with the coverage in the plan and will be irrespective
of the actual costs incurred by the Insured Person.
Renewal Benefits: Since renewal is done for such policies every year, check out for
renewal benefits. For example Bharati AXA policy rewards no claims as follows, Renewal
discount of 5 percent for every claim-free year, up to a maximum of 25 percent. Higher
renewal benefits are important as there may be a claim in the initial years of policy and
hence no claim bonus reduces cost of coverage.
Coverage Age: Check out till what age is the policy covering critical illness. For example
Star Criticare Plus covers the illness upto the age of 70 years of age. Some other
insurance companies cover critical illness only upto 65 years of age.
While there are the many other factors that a person buying critical illness needs to look at
like hospital network, claim settlement history etc., there is very limited scope for trade off in
case of critical illness cover in terms of cost!!! Buy the most suitable policy for you and
ignore the cost even if it costs a little more.
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