Critical illness insurance provides cover on account diagnosis of critical illness. Just like life insurance policy, premiums paid for critical insurance policy are allowed as a deduction from income while computing the tax liability. But unlike an insurance policy, the policy amount is paid to insured instead of a nominee (in life insurance).
The claim received provides financial support during the time of critical illness. The critical illness insurance provides cover on the following diseases namely cancer, kidney failure, heart attacks, and strokes.
Whenever one comes across such a critical illness situation, one is accompanied by financial burden. During those times, critical illness insurance provides financial support and helps in getting best medical treatment.
Importance of Critical insurance policy –
Critical insurance policy not only helps in meeting the medical bills, but it aims at overall well-being of the insured. The insured can use the policy amount for any private purpose be it a payment of rent or loan/loan installments.
The amount of cover is the policy amount that can be claimed in the event of critical illness being discovered. It is specified after analyzing the details of the insured which includes his age, heath status, occupation, family background, hereditary factors and disease(s) (if any), etc. The insured in required to make regular payment of premiums (it can be monthly, quarterly, semi-annually or annually). The premium amount is specified after accounting for the above-given details of the insured. Higher premiums assure higher coverage amount.
Critical Illness Insurance Plans –
Various critical illness insurance plans have been made available by different insurance companies. The selection of a particular insurance plan must be made after having a thorough knowledge of the market. Not all the policies cover all type of illness. Some polices include while some exclude drug-related claims and illness caused due to drug abuse. Critical illness insurance is of two types.
- First one is individual critical illness insurance plan
- The second one is group critical illness insurance plan
Group critical illness insurance plan is mostly considered by corporate houses employing 50 or more employees as they can avail these insurance plans at discounted rates. The rates of premiums are affordable in group critical illness insurance plan and can be easily managed by employees. It provides employees with needed financial assistance during the times of health problems.
When the needs of the family are accompanied by own illness, it becomes difficult to make ends meet. Critical illness insurance is one such insurance plan that provides financial stability during the times of needed support and helps in recovering from emotional stress.
This type of insurance is mainly useful for only those whose social insurance does not sufficiently cover any of the lethal diseases. The requirement for such insurance is mainly felt in nations with incompetent social safety measures. The additional advantages that come together with critical insurance need not be the reimbursement of medical expenditures only. The insurance plan might also cover the aftermaths of the ill health.