Critical benefit policy

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Treatment for cancer, bypass surgery, organ transplant, and paralysis is very costly. While depressing down the patient, these create havoc in the family with respect to financial status. Though you may have general health policy, the coverage is limited. So, a critical illness policy helps here immensely.

When is it useful

General health policy pays only the expenses incurred from hospitalization. But a critical illness policy pays the whole insurance amount once the policy holder gets critically ill. You may be thinking about the need of having this along with general health policy. Generally, if any critical disease is diagnosed, it takes a lot of time to get cured and is also very costly. Health policies pay hospital expenses, home treatment, and other transport related expenses albeit with some limitations. But a critical policy pays the whole insurance amount on diagnosis without counting the expenses like other general policies. This amount can be utilized not only for treatment but also other expenses and family maintenance during recovery.

How to get this policy

· This critical illness policy can be taken as a rider to normal life insurance policy or bought as a separate health policy.

· The riders taken along with life insurance cover from 1 to 10 years whereas the health policy covers 1 to 5 years.

· A critical health policy can be taken individually or as a floater for the whole family.

· Policies are available for customers from ages 6 to 75.

Insurance protection

Insurance policies cover some selected diseases. There are policies available in the market that cover 10 to 20 diseases. These policies cover from 1 lakh to 50 lakhs.

Exemptions

· This policy is not applicable to pre-existing diseases.

· The insurance company will not pay anything for the disease diagnosed within 90 days of buying the policy. This is called waiting period in insurance language.

Survival period:

· The insurance is not applicable if death occurs within 30 days of buying the policy.

· There are limitations with respect to payment for certain diseases. This is called sub limit and changes from policy to policy.

Things to note:

· This policy cannot be seen as an alternative to general health insurance policy. A general health policy covers all health problems whereas critical illness policy is applicable only for critical diseases and has to be looked as the one that provides additional coverage only.

· While choosing a critical policy, it is prudent to take the right policy that covers predictable diseases based on his habits, history, etc.

· Know the sub limits on different diseases before taking a policy.

· Better to choose a policy that has higher renewal age limit.

· This is exempted from income tax per section 80D.