On this World AIDS Day, we, at BankBazaar, stand in solidarity with all people living with or affected by HIV. To this end, we want to reiterate the fact that healthcare must be a top investment priority to ensure HIV treatments and care are affordable and available to everyone, everywhere.
We all dread falling ill with a major critical illness. It could be anything from a stroke to AIDS. But in case of someone we know or if we ourselves fall ill, it helps to know how we can safeguard ourselves, at least financially. That’s where Critical Illness Plans can help.
What is a Critical Illness Plan/rider?
A Critical Illness Plan is a Health Insurance plan which will pay a lump sum amount if you are diagnosed with a critical illness. A critical illness rider is like a supplement to your Health Insurance plan. The cover will not be as good as a Critical Illness plan.
With a Critical Illness cover, the lump sum paid to the policyholder will take care of the treatment and medical care costs, as well as expenses incurred during recuperation. Riders usually pay out only the sum assured and may not include hospitalisation expenses.
Additional Reading: 5 Things You Must Consider When Buying Health Insurance For Senior Citizens
How is a Mediclaim policy different?
A Critical Illness plan is a defined benefit plan where the amount that will be paid to the policyholder is fixed at the commencement of the plan. A Mediclaim Policy is one that reimburses any expenses incurred by the policyholder.
How much Critical Illness cover would you need?
This will, of course, depend on the type of critical illness. Ones that require years of treatment will cause you to shell out more. Falling prey to a critical illness will have a negative impact on your lifestyle and might even affect your earning capacity. Not having a Critical Illness Plan would mean borrowing money or liquidating existing investments to cover medical expenses.
Before calculating the cover, you might need, you should consider your family history, your type of job, age and also factors in increasing medical costs. If your family has a history of critical illnesses, you could go for a higher cover.
Waiting period for a Critical Illness Plan
Most Critical Illness plans have a waiting period of 30 days after being diagnosed with an illness. The policyholder can make claims only after this waiting period. Remember, if your plan has a waiting period of 30 days, the policyholder will need to survive for 30 days after being diagnosed to be eligible to make a claim.
There is also a waiting period of 30-90 days after you buy the policy. A critical illness detected within this waiting period will not usually be covered under the policy.
Where can you get a Critical Illness Plan/rider?
You can get the policy or rider from a:
- Health Insurance company
- Life Insurance company
If you choose to get a Critical Illness Plan from a Life Insurance provider, you might only get it as a rider to your Life Insurance policy. If the Critical Illness Plan is added as a rider to your Life Insurance policy, there are two situations that you might have to deal with:
- The base policy will continue after the Critical Illness rider is utilised.
- The base policy is terminated if the Critical Illness rider is utilised during the policy term.
Speak to your insurance provider regarding this.
What is the difference between a Critical Illness Plan and rider?
If the Critical Illness plan is a rider added to the Life Insurance policy, the premium payable remains the same for the entire term of the policy. This means a more affordable policy. A major benefit of getting a Critical Illness cover as a rider with your Life Insurance policy is that after the Critical Illness cover is utilised, the insured person will still have an existing life cover.
For a standalone Critical Illness Plan, the premium you need to pay will keep changing as the policyholder advances in age. Remember, it is difficult to find an insurance provider who will be willing to offer a life cover to a person who has a critical illness.
A more convenient option would be to get a Critical Illness Plan from a Health Insurance provider. This is a more popular choice. These policies offer the policyholder a higher degree of flexibility to choose a higher sum assured compared to a plan that is offered as a rider.
Additional Reading: 7 Helpful Tips To Choose The Best Health Insurance Plan
Before choosing a Critical Illness Plan, remember to read the terms and conditions of the plan and note the exclusions mentioned. You have to check if all the critical illnesses such as AIDS that you want a cover for are mentioned in the policy.