Life can throw surprises, some of them not so pleasant. Being diagnosed with a critical, life-threatening health condition is one such unwanted surprise from life. Conditions such as kidney failure, paralysis, or cancer can prove fatal and require intensive treatments for longer durations. These treatments can be quite expensive and soon become a financial burden for the patient and their loved ones. This is where critical illness insurance comes in useful. Critical Illness Health Insurance plans help in meeting the high costs associated with treatment and provide financial security to the insured. Let us understand what is a critical illness policy and the workings of a critical illness health insurance policy.
Table of Contents
- What are Critical Illness Health Plans?
- Features of Critical Illness Insurance Plans
- Advantages of Critical Illness Insurance
- Coverage for Treatment Received Abroad
- Why are Critical Illness Insurance Plans Necessary?
- Tax Benefits Under a Critical Illness Insurance Policy
- Critical Illness Insurance v/s Health Insurance Plans
- How to Select an Ideal Critical Illness Insurance Plan?
- Mode of Buying Critical Illness Insurance Plans
- Comparison of the Best Critical Illness Insurance Plans in India
- Advantages of Critical Illness Riders
- How to File a Claim for Critical Illness?
- Documents Required to File a Claim
- What is Covered Under Critical Illness Insurance?
- What is Not Covered Under Critical Illness Insurance?
- Who Should Buy a Critical Illness Insurance Policy?
- Why Choose Turtlemint for Critical Illness Insurance
- FAQs
What are Critical Illness Health Plans?
Critical illness health plans are health insurance plans offering a fixed benefit covering a specified list of critical illnesses, such as stroke, major organ transplants, cancer, lung failure, multiple sclerosis, and liver failure. A critical illness cover offers financial protection against such life-threatening diseases that require intensive care. Under critical illness insurance, if the policyholder is diagnosed with any of the covered critical illnesses during the term of the plan, the sum insured is paid in lump sum irrespective of the actual medical costs incurred.
Features of Critical Illness Insurance Plans
Critical illness insurance plans have some of the following distinctive features, which are detailed as follows:
- A critical illness policy covers specific illnesses as well as other treatments and surgeries included in the critical illness list.
- Critical illness plans allow you to opt for high sum insured amounts so that you are adequately covered in case of severe illness or require advanced treatment.
- These plans pay the full sum insured as soon as you are diagnosed with a critical illness that is covered under the policy.
- Premiums are generally affordable because critical illness plans cover only specific illnesses. If you are hospitalized though, these plans would not cover the claim for hospitalization.
- A critical illness policy is generally issued on an individual sum-insured basis. However, some plans also allow floater coverage.
- Critical illness insurance plans can be issued by both life insurers and health insurers. Life insurers issue a long-term policy while health insurers issue annual plans.
- If a claim for critical illness is made, the policy will be terminated after the claim has been settled.
- A critical illness policy is independent of other health insurance plans that you might have invested in. Even if you have an existing health plan, the critical illness policy would pay for the claim made in case of diagnosis of the covered illness.
- The premium payable for critical illness insurance plans qualifies as a deduction under Section 80D of the Income Tax Act, 1961. Deductions of up to INR 25,000 can be claimed if you are less than 60 years old, or up to INR 50,000 if you are aged 60 years and above.
- Critical illness plans have a survival period ranging from 30 – 90 days. A claim for critical illness will not be paid in the event of the unfortunate death of the insured during this period.
- Many critical illness plans allow for a free second opinion from the company’s empaneled experts in the case of diagnosis of a covered critical illness.
Advantages of Critical Illness Insurance
Critical illness insurance plans offer several benefits to the policyholder, including the following:
- Lump Sum Payout: Most critical illness plans provide a lump sum amount that can be used for treatment. Also, when a person is diagnosed with a terminal illness, the payout of the policy can serve as an income replacement. The plan is an ideal means of financial security for the patients and their families in times of distress.
- Tax Benefits: You can avail of tax benefits on the premium paid for a critical illness policy, as per section 80D of the Income Tax Act. Moreover, critical illness insurance payouts are tax-free.
- Cost-Effective Plans: A critical illness insurance policy offers the benefit of affordable premiums since you only need to pay for the specific illness that is covered under the plan.
How Does a Critical Illness Policy Work?
Given below is the step-by-step process of how a critical illness cover can be used to your benefit:
- Buy the plan: Choose a suitable insurer to purchase a critical illness policy.
- Select the illnesses to be covered: After buying the plan, opt for the illnesses from the critical illness list that are covered by the insurer. A few examples are heart attack, renal failure, cancer, stroke, major organ transplant, and more.
- Check for the waiting period: A waiting period is generally provided in every critical illness policy. This refers to the time you would need to wait before you can make a claim. No claim can be made during the waiting period.
- Coverage for diagnosis and treatment: The insurance company would cover your expenses for a critical illness that is diagnosed within the waiting period. In this case, a claim may be made provided you have the necessary medical records to certify your claim.
Always make timely premium payments to keep availing of the coverage benefits of critical illness insurance. Also, make sure to renew your policy each time it lapses.
Coverage for Treatment Received Abroad
Another huge benefit of critical illness health insurance is that you can choose to receive treatment for a specific condition overseas and still avail of the coverage provided by the plan. Most Indian insurers now offer critical illness health covers to Indians who opt for receiving advanced treatments for critical health conditions outside India. Coverage for the illness under the plan makes the treatment more affordable and accessible to all.
Why are Critical Illness Insurance Plans Necessary?
We already mentioned the benefits of buying a critical illness insurance policy. However, apart from the various advantages it offers to the policyholder, several reasons necessitate buying a critical illness plan. Some of these reasons are shared below:
- Rising incidents of critical illnesses: Critical health conditions such as cancer, tumors, and heart ailments are on the rise more than ever now. A greater number of people are diagnosed with these common critical illnesses that require intensive treatments, which generally last for longer durations and are also heavy on the pocket. A critical illness plan provides the much-needed financial coverage that makes the treatment for the patient affordable.
- Expensive treatments: As stated earlier, treatments required for critical illnesses are costly. You therefore need a special plan that pays for the treatment when a standard health insurance might prove insufficient.
- Flexible usage of benefits: Critical illness plans come with flexible usage of benefits meaning that the lump sum amount of money paid to the insured can be used for advanced treatments or any other financial liabilities.
- Supplement existing health insurance plan: Critical illness plans can be used to supplement an existing health insurance plan in the event of any critical illness diagnosis.
Tax Benefits Under a Critical Illness Insurance Policy
Critical illness health plans are entitled to certain tax benefits under the Income Tax Act (ITA), 1961 defined by the Government of India. Under Section 80D of the ITA, policyholders can avail of tax discounts of up to INR 25,000 on the critical illness policy. Additionally, senior citizens are eligible to avail of tax benefits up to INR 50,000.
| Tax Benefits | Description |
| Coverage for complete family | Tax deductions on family floater plansUp to Rs. 25,000 for family members aged 60 years and lowerUp to Rs. 50,000 for family members aged over 60 years (senior citizens) |
| Preventative medical check-ups | Preventative health check-ups and screening tests can be deducted since they help diagnose critical illnesses timely. Expenses incurred on check-ups and all indirect costs are deducible |
| Payment of premium | Premium amount payable on critical illness insurance is tax-free (subject to limit) |
| Critical illness rider benefit | Premium on the rider that provides coverage against certain specific critical illnesses is eligible for tax deductions under Section 80D of the ITA |
Critical Illness Insurance v/s Health Insurance Plans
A critical illness insurance plan is often confused with a standard health insurance policy. While both plans offer health insurance coverage to the policyholder, they are not quite the same. A critical illness insurance plan falls under the larger umbrella of health insurance. Listed below are a few points that show the similarities and differences between critical illness and other health insurance plans:
How is a critical illness insurance policy similar to a health insurance plan?
- Both these plans cover financial loss during a medical emergency
- Both plans pay claims in case of severe illness or the need for advanced treatment
- Both policies can be purchased for self as well as family members
- Both plans allow tax benefits on the premiums payable
How is a critical illness insurance plan different from a health insurance policy?
The table below highlights the differences between critical illness and other health insurance plans to help you make an informed choice:
| Critical Illness Insurance | Health Insurance |
| It is a type of health insurance | It is a broader plan that includes critical illness insurance as well |
| It covers specific critical illnesses and medical treatments such as cancer, stroke, bypass surgery, major organ transplants, and the like | It covers medical costs incurred during hospitalization due to any illness or injury, except those which are excluded under the plan |
| Full sum insured is paid as claim | The actual medical costs incurred are paid as claim, subject to a maximum of the sum insured |
| Independent claims can be made from each policy if you have multiple critical illness plans or a combination of health insurance and critical illness plans | If you have more than one health insurance policy, the claim can be shared under both the policies in a ratio of your choice. However, you cannot claim for the same medical expenses from both policies |
| Premiums are low because only specific illnesses are covered under the plan | Premiums are higher since health plans allow a wider scope of coverage |
How to Select an Ideal Critical Illness Insurance Plan?
It is very important to buy the right critical illness insurance plan for your loved ones to avail yourself of the best benefits in any unforeseen event. Make sure to bear the following points in mind to buy the best critical illness insurance for your loved ones:
- Go for a stand-alone policy rather than choosing an add-on: Though it is possible to add a critical illness cover to your existing health insurance plan just by choosing the add-on, it may not be as effective as buying a full-fledged critical illness insurance plan. Always opt for a stand-alone policy to avail of the maximum coverage benefits despite the high cost involved, rather than the critical illness rider.
- Look for the coverage provided: The main role of critical illness insurance policies is to offer coverage against fatal diseases. Make sure to check the list of diseases that are covered in your plan. Some plans offer coverage for more critical health conditions than others.
Tip: Consider your family history, lifestyle, smoking habits, and more, to determine the policy that would best match your requirements.
- Consider the waiting period before buying: Waiting period is the time during which no claim requests are settled. Go for a policy that has a shorter waiting period so that you can be adequately covered in case of a medical emergency.
- Look for the covered illnesses: The higher the number of illnesses covered, the wider the scope of coverage. Make sure to check out the list of illnesses covered under each plan offered by different insurers while making your choice.
- Check for the permissible sum insured limit: Critical illness plans generally allow coverage up to specified levels. Make sure to match your coverage requirement with the allowed coverage levels and choose a plan that offers the coverage amount you require.
- Compare premium rates: Critical illness plans have relatively lower premium rates. Make sure to compare the premiums payable under different critical illness plans. Also, compare the premium vis-à-vis the coverage offered to make an informed choice.
- Check for renewal limit: Some critical illness plans have a limit for renewability based on age. It is best to check the renewal limit of the plan that you opt for and compare it with other plans offered.
- Determine the age benefits: Check for the minimum benefits of age offered for a plan that you select. Applying for a plan when you are younger may help you receive better feature benefits.
Mode of Buying Critical Illness Insurance Plans
Once you have chosen the best critical illness insurance plan for your exact requirement, you can proceed with buying one in either of the two following ways:
1. Offline mode
You may visit the nearest office of the insurance company that you want to opt for or buy the policy through an agent of the insurer. You would need to submit a physical form at the office to buy the critical illness policy offline.
2. Online mode
This is a more convenient way of buying a critical illness policy. To buy online, you can visit the official website of the insurance company or the insurance aggregators and invest in a plan of your choice. The policy is issued instantly online. You can also compare the critical illness coverage offered by different plans and then choose the best critical illness policy that offers comprehensive coverage at competitive premium rates.
Turtlemint is an online platform that allows you to buy critical illness insurance plans after comparing all plans. You can visit https://www.turtlemint.com/, go to ‘Buy New Health Policy’, and find the best critical illness insurance in India for your needs. You can also reach out to an expert Turtlemint Insurance Advisor to guide you through the process of buying this plan.
Best Critical Illness Insurance Plans in India
To help you make an informed decision with buying your plan, the table below lists some of the best critical illness insurance plans in India:
| Name of the Plan | Salient Features |
| HDFC ERGO Optima Vital | • Up to 37 critical illnesses covered • Sum insured allowed up to Rs. 50 lakhs • E-opinion available upon diagnosis of critical illness |
| Care Critical Illness Health Insurance | • Up to 32 illnesses covered • Sum insured up to Rs. 1 crore • No survival period • In-built coverage for personal accidents too • Free health check-ups and medical second opinion |
| Star Criticare Plus Insurance Policy | • Coverage against 9 major illnesses • No survival period • Non-allopathic treatments also covered • Coverage for hospitalization expenses even after the claim has been paid |
| Manipal Cigna Lifestyle Protection – Critical Care Insurance Plan | • Coverage of up to 15 illnesses under the Basic plan variant and 30 illnesses under the enhanced plan variant • Sum insured under both the variants is Rs. 1 lakh – Rs. 25 crores • Claim can be received in a lump sum or staggered payments • Online wellness programs designed for policyholders • Free medical second opinion for critical illness |
| Bajaj Allianz Critical Illness Plan | • 10 major illnesses covered • Sum insured up to Rs. 50 lakhs • Claim settlement through specially-developed app |
| HDFC Ergo Critical Illness Policy | • The plan comes in two variants – Basic and Platinum • Basic plan covers 8 critical illnesses and Platinum covers 16 • Sum insured up to Rs. 10 lakhs • Lifelong renewability • Tax benefits offered on the premiums paid |
| Reliance Critical Illness Policy | • Coverage for 10 major illnesses • Sum insured up to Rs. 10 lakhs • Easy claim settlement • No medical tests required• Tax benefits offered |
| Future Criticare Plan | • Coverage for 12 illnesses • Sum insured up to Rs. 50 lakhs • Floater coverage available |
| Aditya Birla Activ Secure – Critical Illness Plan | • Up to 64 critical illnesses covered • Sum insured up to Rs. 1 crore • Waiting period up to 180 days • Survival period for 15 days |
| Cholamandalam MS Critical Healthline Insurance Plan | • Coverage for 12 illnesses • Sum insured up to Rs. 10 lakh • Waiting period for up to 90 days • Survival period for 1 month |
Advantages of Critical Illness Riders
A critical illness rider is an add-on coverage benefit that can be added to your base health insurance plan in return for an extra premium. This avoids the need to buy a separate policy in case you are diagnosed with a critical or life-threatening condition. There are many benefits of availing a critical illness rider, some of which are:
- It guarantees financial security to the insured in the event of a diagnosis of a life-threatening or critical health condition. They can look forward to receiving the best treatment for the condition without worrying about the expense involved.
- It serves as a replacement for income in cases where the patient is also the primary bread-earner of the family.
- A critical illness rider improves the probability of survival for the insured since they can now focus on receiving the appropriate treatment without worrying over the cost involved.
How to File a Claim in a Critical Illness Policy?
Following are the steps to file a critical illness policy claim:
- Visit your insurer’s official website to file your claim. You can also call the company to file your claim request. It is recommended that you file a claim within 1 month of a critical illness diagnosis. Make sure that the critical illness must be covered by your insurer.
- Answer a few questions related to your claim and submit all the required documents, including a duly filled claim form, photocopy of your ID card, and medical certificate of the diagnosed critical illness.
- Submit the claim and wait for it to be verified by the insurer (usually within 15 days from discharge). The company will inform you of its decision whether or not your claim request has been approved. In case of approval, the claim will be settled by the insurer within 1 month of the receipt of all documents.
Documents Required to File a Claim
When filing a claim for critical illness insurance coverage, the following documents must be submitted to the insurer at the earliest (ideally within 30 days of the diagnosis):
- A detailed diagnosis report by a medical practitioner of a critical illness covered by the insurer
- All related and relevant medical reports for the health condition, which includes doctor’s prescription, case history, medical records of treatment undertaken, results of diagnostic tests, X-rays, etc., discharge summary from the hospital
- Pre-authorized claim form
- Proof of ID and residence
- Health insurance card/copy of your critical illness insurance plan
What is Covered Under Critical Illness Insurance Plans?
Critical illness plans cover a list of severe health conditions. Some of the common illnesses and treatments covered by the best critical illness cover are listed below:
- Cancer
- Stroke
- First heart attack of specified severity
- Paralysis of both limbs
- Multiple Sclerosis
- Major organ transplant
- CABG
- Repair of heart valves
- Coma of specified severity
- Bone marrow transplant
- Motor neuron disease
- Aplastic anemia
- End-stage liver disease
- Optional coverage provided for international e-opinion on the condition, COVID-19 care, non-payable items, and the like
- Domiciliary and daycare treatments covered under the plan
- Yearly health check-ups are also included
If the insured is diagnosed with any of the above-covered illnesses, the sum insured would be paid in a lump sum.
What is Not Covered Under Critical Illness Insurance?
Critical illness plans do not cover hospitalization expenses or any other illness or treatment except those specified in the list of critical illnesses. Following are some exclusions under the critical illness insurance plan:
- Pre-existing critical conditions
- Health conditions due to war or nuclear contamination
- Illnesses during the initial waiting period ranging 30 – 90 days
- Health conditions due to consumption of alcohol, drugs and/or tobacco
- HIV/AIDS and other diseases that are sexually transmitted
- Pregnancy and related expenses
- Cosmetic treatments
- Death of the insured owing to a critical illness is not covered in case the survival period of the policy was not completed
- Treatment for infertility conditions is not covered under the plan
Illnesses Covered Under Critical Illness Insurance Plans
Critical illness health insurance plans provide coverage for specific illnesses that are diagnosed as severe or critical and may require prolonged treatment and heavy treatment costs. A list of such illnesses is provided in the table below:
| Critical Illness | Coverage Provided |
| Kidney failure | One-time lump sum paid for dialysis, kidney transplant, and follow-up |
| Cancer | For different types of cancer, covers surgery and the high cost of treatment involved |
| Coronary Artery Bypass Surgery | Treatment costs for severe heart problems and bypass surgery |
| Heart attack | All costs incurred on medical bills and treatment for recovery covered |
| Coma | All treatment costs covered |
| Stroke | Coverage for medical bills and recovery post-stroke |
| Major organ failure | Cost for treatment of lung or liver failure |
| Organ transplant | Cost of major organ transplants – lung, kidney, heart, and liver |
| Paralysis | Lump sum for rehab, cost of medical treatment, and changes to the living area in the event of paralysis |
| Multiple Sclerosis | Treatment costs and expenses on care provided |
Who Should Buy a Critical Illness Insurance Policy?
A critical illness insurance plan is ideal for anyone. It is one of the best protection means to secure your loved ones against an unexpected unforeseen event that may result in a sudden loss of pay. In the case of a severe prolonged illness, you may not be able to work even and may lose pay for a considerable period. Your expenses however would need to be met regardless, especially taking into account the treatment cost of the illness post-diagnosis.
This is where a critical illness policy comes of use, particularly for your family members, benefiting them with monetary support in the absence of your pay. The amount is paid as a lump sum which can also be used to cover the expenses incurred in buying medicines, getting diagnostic tests, hospitalization charges, if necessary, and other household expenditures. While this plan can help every individual, listed below are a few examples of those who must consider buying a critical illness cover as part of their health insurance plan:
- Those already diagnosed with a critical illness
- Those with a family history of a specific disease
- Those who have entered or are about to enter their 40s
- Those who are the single bread-earners of the family
- Those who are prone to diseases
Factors to Keep in Mind While Opting for a Critical Insurance Policy
Buying critical illness insurance for your loved ones is a crucial decision to make. Keeping a few pointers in mind can help make an informed decision:
- Check for the list of network hospitals: The larger the network that the insurance company affiliates with, the more options you have to avail of cashless treatment in your vicinity in the case of an emergency.
- Check for coverage provided: Always check the complete list of illnesses covered by the insurer and make sure that the critical illness for which you require coverage is included in the critical illness list of the provider.
- Check for add-on riders: Additional benefits over and above those provided under the base plans can be helpful, for instance, income benefits and waiver of premium riders.
- Check for policy renewal: Look at the time of renewal of the policy and make sure to apply for timely renewals to avoid the benefits from lapsing with the expiry of the policy.
- Check for exclusions: Every insurance policy comes with a list of exclusions. In this case, it would mean the critical illnesses that are not covered under the plan. Make sure that the critical illness you need coverage for is not included in the exclusions list.
- Check for premium amount: If possible, do a basic ground search on the premium rates for different insurers. Also, check for the flexibility of premium payment offered by different providers.
Why Choose Turtlemint for Critical Illness Insurance?
A critical illness plan should only be bought after a thorough comparison. Turtlemint allows this comparison simply and efficiently. All you need to do is fill in your requirements and you will receive a list of all available critical illness plans offered by the best critical illness insurance companies in India. You can then review the available plans and choose the one that best matches your requirements. You can also reach out to us for any assistance or queries on claims for your critical illness policy. Turtlemint provides a complete package of the best critical illness plans for your healthcare needs.
How Important is Critical Illness Insurance for Family?
While general health insurance plans are a must for every member of the family, right from a newborn to a senior family member, buying critical illness plans has exclusive benefits for the family as a whole.
This is because when an individual family member is unfortunately diagnosed with a severe illness, it can be rather distressing – both emotionally and financially for the entire family. The hefty treatment costs can cause an undue financial burden. This can be particularly difficult to manage if the person diagnosed is a primary bread-earner for the entire family.
In such cases, buying a critical illness policy for each member of the family can be particularly advantageous to all. Since the policy pays out a lump sum benefit in the case of diagnosis of a critical illness covered under the plan, the money can help cover the treatment and care expenses for the patient, along with providing for the daily household costs for the whole family. This can ease the financial load on your loved ones and compensate for the absence of pay to the household due to the diagnosis.
Eligibility Criteria for Purchasing a Critical Illness Plan
Who can apply for a critical illness insurance policy? The table below includes the key factors to be considered for deciding whether or not you are eligible to buy the plan:
| Eligibility Parameters | Who Can Apply |
| Minimum age for entry | Children: 91 days – 4 years (at least 1 member covered under the plan should be 18 years or older) Adults: 18 years or older |
| Maximum age for entry | Lifetime entry allowed |
| Age for policy exit | None |
| Proposer age (adult) | 18 years or older |
| Who is covered under the plan and their relationship to the proposer | Self, parents, siblings, spouse, kids, in-laws, grandparents, uncle, aunt, nephew, niece, employee (any other relation with insurable interest can be covered) |
FAQ’s
It can get difficult to buy a plan after diagnosis. Most insurance companies require the policyholder to be in good health at the time of buying the critical illness insurance plan. It is therefore important to plan and buy the policy to ensure coverage against unforeseen events in the future.
The average age range for which critical illness insurance plans can be purchased ranges between 5 and 65 years. All insurers may have their eligibility criteria so it is best to check with the specific insurer you plan to buy the policy from.
Some of the best critical illness insurance plans in India are Care Health Insurance, Bajaj Allianz, Bharti AXA Life, Navi Health Insurance, and Niva Bupa Insurance.
A critical illness cover helps enhance the financial coverage provided by your existing mediclaim policy. This is why it helps to buy a critical illness insurance policy in addition to the base health insurance plan.
The amount of coverage required for critical illnesses would generally depend on your monthly expenditure on treatment of the condition and also the type of illness and treatment required.
Critical illness plans generally provide coverage for 36 critical illnesses, some of which include the following:
- Kidney failure
- Multiple Sclerosis
- Chronic lung disease
- Brain surgery
- Benign brain tumor
- Coma
- Cancer
- Stroke
- Heart attack
Yes, premiums paid for critical illness plans are allowed a deduction under Section 80D of the Income Tax Act, of 1961. The limit is Rs. 25,000 which increases to Rs. 50,000 for senior citizens.
Yes, critical illness plans pay the claim irrespective of other health insurance claims that you might have received.
The claim received under a critical illness plan can be used for any financial purpose whether it is medical or personal in nature.
The survival period refers to the time the insured should survive after being diagnosed with a critical illness to be eligible for getting a claim under the critical illness plan.
The duration of the survival period depends on the critical illness plan. It usually ranges from 30 to 90 days.
If the insured does not survive the survival period, no claim is paid under the critical illness plan.
