Critical Illness Insurance: Claim, Coverage & Exclusions

Updated: 01-10-2019 12:32:19 PM

Stressful life and unhealthy lifestyle have increased the chance of suffering from critical illnesses. These diseases can be serious health conditions with a negative effect on the overall life of a person. All these have the potential to create financial problems by affecting the savings of a person. To cope with the financial aspect associated with such ailments, like cancer, you can opt for a critical illness insurance.

What is Critical Illness Insurance?

It is a type of health insurance under the category of fixed benefit plans. It offers a fixed amount to the insured in case of the diagnosis of a critical illness mentioned in the policy like cancer, stroke, heart attack, paralysis. The plan provides financial help for the treatment of these diseases. Thus, the insurance helps manage health care expenses without making a hole in the pocket or affecting other financial responsibilities.

Eligibility Criteria

Here are details of who can purchase this health plan.

• Adults above 18 years (medical examination for those above 45 years)
• In case of children, for some providers, it is 3 months old

How the Plan Functions

Critical illnesses often demand extensive medication, treatment and in some cases, even expensive surgeries. Thus, the medical expenses in these cases include hospitalization costs and various types of tests and medication. That’s when a good critical illness insurance plan helps meet the financial needs.

• On the diagnosis of a critical ailment like cancer or liver failure, the plan is to be solicited by the policyholder or nominee
• One can opt for either the cashless claim facility available at all the network hospitals of the insurance provider and get authorization at the time of admission itself or one can go for reimbursement which involves document submission along with medical bills and reports of the hospitalization post treatment
• Verification is done by the insurance company and when all is found to be valid, claim amount is released (to the hospital directly in case of cashless claims and to the account of the policyholder in case of reimbursement)

What all it Covers?

Following points are covered in a critical illness plan:

• Dialysis due to kidney failure
• Various types of cancer – lung, throat, breast, liver, etc.
• Limbs getting paralyzed, resulting in long-term symptoms
• Any neurological disease having permanent symptoms
• Multiple Sclerosis
• Meningitis and anaemia (Aplastic)
• Losing speech or hearing power
• Liver or lung diseases encountering the last stage
• Hepatitis
• Severe Burns
• CABG
• Kidney failure
• Benign brain tumour
• Permanent paralysis of limbs
• Parkinson’s disease

Note: This is not an exhaustive list and illnesses covered may vary for different providers.

Documents Required for Claim Process

Following documents are needed for filing claims:

• ID Proof of the claimant
• Claim form (duly filled & signed)
• Copy of hospital summary, discharge papers, prescription, medical reference, etc.
• Copy of medical reports, records
• Doctor’s certificate
• Any other relevant document as requested by the Insurer

Claim Process  

Follow the steps mentioned below to make claims under a critical illness insurance policy:

• Inform the insurance company about the diagnosis as soon as possible
• The representative from the company shall provide you exact list of documents to submit
• Collect the said documents and submit within 90 days of first diagnosis of the ailment
• After verification of the submitted documents, claim amount will be released that one can utilize as per their convenience

Exclusions under Critical Illness Insurance

• Any disease caused either due to prolonged usage of tobacco, drugs or alcohol
• Any diseases caused by disability from birth
• Any health conditions caused by giving birth – includes C-section
• Sexually transmitted diseases like HIV AIDS
• Defence operations like fighting in a war, military duties, or terrorist attacks
• Any surgeries or dental treatments
• Treatment took due to infertility, or any hormonal replacements, and any surgery for reproductive purposes
• Any treatment which has not been taken in the country
• If death occurs within the first month of being diagnosed with a disease

Important Aspects

Here are some points to consider while buying a plan and while making claims later, if needed.

• Sum Insured must be at least 3 times your annual income
• Waiting period should be less
• Premium amount should be low and affordable in your current income
• It doesn’t have any recurring benefits and can be used only once
• This doesn’t require hospitalisation either in the past or currently
• Even if you are not admitted at that time, you can get the claim amount
• It’s always better to buy a critical illness insurance plan in combination with a health insurance plan for a comprehensive coverage
• If you get diagnosed with a serious illness, you can use critical illness insurance plan to manage the expenses. But you cannot buy a critical illness plan after being diagnosed with the disease. Thus, it makes sense to buy this plan in advance.
• You should consider buying the plan if there is a history of some critical illness running in your family

Advantages of Buying the Insurance

Lump sum amount is paid at the time of diagnose, giving the policyholders the freedom to utilize it as per their convenience. Some other advantages are:

• Treatment can be taken at home or in a hospital as the amount is paid before the treatment
• The policy can be taken for a period of up to 30 years
• High sum insured ranging from Rs.5 lakh – Rs. 50 lakh
• Tax benefits under Section 80(D) of the Income Tax Act, 1961

FAQs

Q1. What is a sub limit?

Sub limit is the fixed amount set for a particular disease in the plan. On diagnosis of the said illness only that amount will be paid and nothing more.

Q2. I have a health insurance plan. Should I still go for critical illness insurance?

Yes. A health insurance plan comes with exclusions where illnesses like cancer, HIV AIDS, etc. are not covered. Thus, to cover such ailments, you require an apt critical illness insurance plan.

Q3. Can I claim this policy more than once?

No. Critical illness can only be claimed once for one particular ailment.

Q4. What happens if I’m diagnosed with a covered illness after 10 days of purchasing the policy?

In such a case, you will not be able to make any claims as the normal waiting period ranges from 1 to 3 months from the commencement of the policy.

Q5. I have been diagnosed with a terminal disease which is covered in my critical illness insurance policy. Should I use it for treatment only or can I utilize it as alternate income?

Once the amount is released, you can use it for any purpose. If you think that you don’t want treatment for a terminal ailment and would rather utilise it for providing income, then this can be done.

Q6. Can I include my family members in the critical illness insurance?

Yes. Immediate family members like spouse and children can be added in the policy.

Q7. Can I buy this plan of critical illness insurance for my 10-year-old son?

To be eligible for this plan, one must be at least 18 years old.