Your Handy Guide to Critical Illness Insurance

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A critical illness plan is completely different from your standard life and health insurance policies.

Critical illness insurance offers the insured a lump sum amount (sum assured) when he/she is diagnosed with a critical disease. Although a typical critical illness policy might be a little expensive, considering its benefits, it’s worth the money.

The most common critical conditions covered under these plans are:

  • Paralysis
  • Blindness
  • Heart attack
  • Stroke
  • Terminal illnesses
  • Cancer
  • Disability
  • Organ transplant


Why Should You Buy a Critical Illness Plan?

A critical illness plan is completely different from your standard life and health insurance policies.

A standard life insurance policy provides life cover while health insurance policy covers any medical issues that you may face. A critical illness insurance plan provides coverage for serious illnesses that are not included in your health insurance policy.

Diagnosis of critical illness is a life-altering event that can shatter your dreams while burning out all your savings. In this age of inflation, where increasing medical costs keep the common man on his toes, getting critical illness cover is, thus, the right thing to do.


Medical Insurance vs Critical Illness Plan

The critical illness cover is different from a standard health insurance plan. Here are some points to show the differences between them.



Medical Insurance

Critical Illness Plan

It works based on frequent benefits.

So, if you are hospitalised several times in a year, you can get the medical benefits from the insurance plan multiple times, given that the claim is valid, and you do not exceed the sum insured limit.

It provides a one-time fixed benefit.

So, if you are diagnosed with a critical illness within the policy term, you will get a lump sum amount in full, at one go. But the benefit ceases till the policy is renewed.

The precondition for filing a claim is that you should be hospitalised for more than 24 hrs.

The requirement for filing a claim is getting diagnosed with a critical disease.

It provides the expenditures sustained during pre and post-hospitalisation.

The payout helps you with the hospitalisation expenses, pay unpaid debts and make up for the lost income due to the illness.

Critical diseases are treated as exclusions in a health plan.

Only critical illnesses are covered here.


While applying for this plan, you should specify if you have a medical condition. Sometimes, one medical condition may lead to another. Hence, it is important to be honest with your insurance company about your medical history. Many insurance companies require the applicant to go through several medical tests as a precondition for getting the critical illness cover.