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Critical illnesses are severe medical conditions that require advanced medical treatments. Many of these illnesses might also prove fatal. 

In India, the incidence of critical illness is on the rise. As per studies conducted by the Indian Council of Medical Research (ICMR),  the estimated proportion of all deaths due to Non-Communicable Diseases (NCDs) has increased from 37.09% in 1990 to 61.8% in 2016.*

Moreover, the cost of treating critical illnesses is also increasing. A common example is the treatment cost of cancer. It can start from Rs.1 lakh and go up to several lakhs.* As critical illnesses are increasing and the costs are becoming unaffordable, a critical illness plan becomes relevant.

What is a critical illness plan?

A critical illness plan is a health insurance policy that covers a list of specified illnesses. Some of the common illnesses covered include cancer, stroke, first heart attack, paralysis, etc. The list of illnesses depends on the policy that you buy. If you are diagnosed with any illness from the list, the plan pays the sum insured in a lump sum. 

Why is a critical illness plan important?

While a health insurance policy also covers critical illnesses, an independent critical illness policy makes sense. Here are the reasons why –

Enhanced coverage:

The treatments associated with a critical illness do not come cheap. They can amount to considerable medical bills which might not be covered fully by your health insurance plans. This is where critical illness plans prove beneficial. By paying an additional claim they give added financial assistance so that you can avail of advanced treatments and prevent the medical bills from draining your savings. 

Provision for your financial obligations:

The claim paid by a critical illness plan can be used for meeting any financial obligation that you might have. If you have an existing loan or you need funds for your child’s education you can use the benefit received from the policy for meeting such expenses.

Added protection:

The critical illness policy adds another layer of protection to your portfolio. Your savings stay protected even in critical illnesses as the plan shoulders the costs.

Tax benefits:

The premium that you pay for a critical illness policy is allowed as a deduction from your taxable income. Section 80D deduction applies to critical illness plans too allowing you to claim enhanced tax deductions, up to Rs.25,000 (if you are below 60 years) or Rs.50,000 (if you are a senior citizen).

Ideally, you should compare the available critical illness plans and choose one which covers the maximum illnesses. Also, opt for an optimal sum insured so that you get the desired financial assistance in an emergency.

Conclusion:

Opt for an optimal sum insured and choose a plan that covers the maximum critical illnesses so that all possible contingencies are covered. Moreover, the premium should be competitive and affordable so that the plan doesn’t tax your pockets.