4 steps to decode a critical illness plan

Step 3: Solo or with health cover?

Remember that critical illness plans are no substitute for the regular health cover. By definition, its application is restricted to 'critical illness' conditions and is not all encompassing. However, in combination with the regular health cover, the critical illness plans work to your benefit.

Imagine an individual who has been diagnosed with cancer and the patient has a health cover of Rs 5 lakh. There are three obvious questions – is this cover enough? What payments are covered? When does the patient or the hospital get paid?

In a regular health cover, the payment typically is associated with hospitalisation. But what happens when the total expense associated with the complete treatment is Rs. 7.5 lakh and out of which the hospitalisation expense is exactly Rs 5 lakh.

Typically, a good insurance policy should take care of the hospitalisation expenses – no doubt there. But how about the other Rs. 2.5 lakh of expenses related to the innumerable diagnoses pre- and post hospitalisation and the period of inactivity which the illness causes? Having a critical illness plan would give you an additional amount to cover that Rs. 2.5 lakh worth of expense.

The two important points form this step are:

(1) The affected person gets paid the full sum ensured and does not have to show evidence of the actual expense, unlike other health insurance types and

(2) The basis of the payment is a positive diagnosis rather than hospital stay.

Step 4: Understanding the caveats and pitfalls

A word of advice to those evaluating and comparing different critical illness plans: Watch out for these:

1. What's covered? The more conditions covered the better. Incidence of critical illnesses in India is on the rise and going by the lifestyle changes is destined to continue rising. So, ensure that you chose a plan which is comprehensive enough.

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