Critical Illness Insurance: Coverage, Benefits & Costs

Is Critical Illness Insurance Necessary?

Health insurance policies are an essential safety net and a safeguard for everyone’s financial future. Despite being comprehensive, traditional health insurance plans only cover a variety of treatment services, such as surgeries, diagnostic testing prescription medications. However, the costs of critical illness often transcend these costs. To fill the gaps in your health coverage, additional plans like critical illness insurance come to the rescue. Interested to know more? Read ahead!


What is Critical Illness Insurance?

Critical illness insurance is a specialized supplemental health insurance plan that covers expenses that your usual health insurance policy does not cover. It provides coverage for life-threatening diseases like cancer, renal failure, liver transplant and more. The objective of critical illness is to provide people with an extra financial safety net in case of a medical diagnosis that could culminate in expensive treatments or hardships.

Unlike typical health insurance plans, a critical illness insurance policy offers a one-time lump sum payment upon diagnosis of a covered critical illness. You can use this money to pay for medical bills and other related costs. However, in exceptional situations, you can also for other reasons, such as paying your mortgage. Critical illness insurance is usually available via an employer’s benefits package or privately.       


What Does Critical Illness Insurance Cover?

The illnesses covered by a critical insurance policy depend on your specific plan. But, some of the diseases that the policy encapsulates are –        

  • Cancer
  • End-stage renal failure
  • Heart attack
  • Major organ transplant
  • Multiple sclerosis
  • Paralysis
  • Coma
  • Alzheimer’s Disease
  • Traumatic head injury
  • Loss of sight
  • Parkinson’s disease
  • Stroke and more

It is essential to delve into the nitty-gritty of your critical insurance coverage as it varies from policy to policy. For example, some critical health insurance plans cover Amyotrophic Lateral Sclerosis and hearing loss, while other policies do not cover these diseases.


What Does Critical Illness Insurance Not Cover?

Some of the health conditions that a critical illness plan do not cover are –

  • Diabetes
  • Asthma
  • Injuries sustained in an illegal act
  • Injuries sustained in war
  • Pre-existing conditions, though a critical illness insurance plan may cover the condition after a time, like after a year of the policy being in effect
  • Self-inflicted injuries


Importance of Critical Illness Insurance

Some of the pertinent benefits of critical illness insurance are –

  1. Coverage Medical Expense and Hospitalization

The medical treatment of certain critical illnesses, such as cancer, kidney failure, etc, can be extremely expensive and can become a huge monetary burden. However, critical illness insurance policy can cover such exorbitant costs and secure your financial future.

  1. Covers Loss of Income

While getting treated for a critical illness, you may need to take several leaves from work. A critical illness plan covers for such an income loss.

  1. Income Replacement

A critical illness not only impacts you but also your family. Critical plans provide a single payment for medical and home expenditures.

  1. Peace of Mind

Dealing with a life-threatening disease takes an emotional, physical and financial toll on the patient and their family.

Also read: Factors to Consider before buying a Critical Illness Cover

So, any extra burden can make things even worse. A critical insurance policy, on the other hand, ensures that you do not have to worry about the financial implications of the treatment or loss of workdays, which makes the treatment and recovery journey a bit more bearable.

  1. Includes Treatment in a Foreign Country

Critical illness insurance might cover the costs of opting for specialized and advanced treatment in another country.

  1. Can Be Used for Different Reasons

One of the biggest benefit of critical insurance plans is that you can spend the money on an array of things, such as –

  • Paying for critical medical services that might otherwise be unavailable
  • Paying for treatments not covered by a traditional policy
  • Paying for daily expenses, which enable the patient to direct their time and energy on healing instead of working to pay their bills
  • Transportation costs, including treatment center visits and vehicle modifications for wheelchairs or scooters, and installing lifts in homes for the critically ill patients who can no longer navigate staircases
  • Terminally ill patients or those who need a restful place to recuperate can utilize the funds to take a vacation with friends or family.


Drawbacks of Critical Illness Insurance

Some of the cons of critical illness insurance –

  • Low Coverage Limits

Critical illness insurance plans usually come with lower benefits. For instance, insurers provide a maximum coverage of USD 50000. Moreover, depending on your financial situation and the cost of the treatment, you may not cover 100 percent of the expenses.

  • Does Not Usually Cover Pre-existing Health Conditions

Pre-existing health conditions are usually not covered by critical illness insurance. Additionally, a lot of policies don’t cover newly diagnosed serious diseases that came from prior diagnoses.

  • Premiums rise with age.

As people age, critical illness insurance costs rise. Young, healthy people may have low rates. But, your premium will get more expensive with age.


A Brief about the Premiums for Critical Illness Insurance

The premiums of critical illness insurance are usually low, but they rise as the policyholder ages.

Also read: Difference Between Critical Illness And Life Insurance

Usually, you can expect to pay under USD 100 a month as a premium for your critical illness insurance. Sometimes, the premium can be as low as USD 25 a month. But, usually, the premiums depend on factors, such as –

  • Your age
  • Your health
  • Whether you smoke or not
  • Where you live
  • The insurance you use


Do You Need Critical Illness Insurance?

Critical illness insurance is an excellent investment if you can get coverage for free or at a law price from an employer. It can also be useful if your health insurance has a high deductible and out of pocket expenses. Last but not least, if you have a family history of certain health conditions, such as cancer or heart disease, a critical illness insurance plan can provide peace of mind and secure your well-being and financial future.