Critical care cover! Do you need it?

What is Critical Illness Insurance?
It is customary for most people to be covered with life insurance. Most people who have taken loans or are generally well informed understand the need for life insurance and hence have acted accordingly.
However there are some important risks in a persons life – early death (covered by life insurance), illness (covered to some extent by medical insurance), loss of income due to illness (very rarely covered – called Critical Illness insurance) and living long without any earned income (covered by a pension plan).
If you have covered yourself with all the four types of policies, you are a well informed and careful person.
However, if you have not taken any cover for loss of income due to illness, you need to take a critical illness cover (also called critical care plan, dreaded diseases cover etc.)

What is it?
Critical illness insurance is a form of health insurance that provides a lump-sum payment should you become seriously ill.
What types of illnesses are covered?

Although they differ from company to company, typical illnesses and diseases covered by critical illness insurance may include:

• cancer
• heart attack
• stroke
• coronary artery bypass graft surgery (CABGS)
• Major organ transplants (as recipient)
• kidney failure
Coverage can also vary according to the degree of severity of, or conditions associated with, an illness or disease. For example, if you are diagnosed with a type of cancer that is treatable and that results in minimal “down time”, you may not be eligible to make a claim.

Also some things like Loss of Sight, Loss of speech, major burns, major head trauma, multiple sclerosis, muscular dystrophy, Parkinson’s disease, Coma, etc. also be covered for a smaller amount.
Coverage cannot be purchased for a pre-existing condition or illness.
Before you buy the actual policy ensure that you read the literature carefully, and then take a decision – it is quite likely that the sales person from whom you buy may not know what he/ she is selling. So the onus is on you to understand what you are buying!
Do you need critical care cover?

In determining your need for critical illness insurance, you should consider your fixed expenses which will happen if you are ill and unable to earn – car EMI, mortgage emi, school fees, rent, life insurance premium, etc. You should also consider benefits that may already be available to you through other insurance policies, such as life insurance and group health insurance. For example, the benefits offered through your employer’s group disability plan may provide appropriate and adequate coverage in the event of a critical illness.
You should also consider your personal circumstances and the added financial strain that could be brought about by dealing with a serious illness or disease. Also take into account the income that your spouse will have to give up if he/ she were to take care of you. Consider child care, travel to and fro to the hospital, and such other ancillary expenses that is not covered by the regular medical insurance.

Can I afford it?

It is surely not cheap! Since the probability of contracting any illness is far higher than ‘death’ it is more expensive than say, a simple term insurance. Also there is no investment element – so it is likely to be cheaper than a unit linked plan in terms of cash flow. As with any health or life insurance, the younger and healthier you are, the lower the premium (cost). However, the cost varies depending on your age, medical condition, the amount of coverage, the policy wording, and the insurance company.

As always, it pays to shop around to get the best rate. However, read the conditions carefully before signing up. When shopping for a critical illness plan, you should consider your income, financial obligations, dependents, and health care needs.

Only when you know the ‘cost’ of not having critical illness insurance, can you appreciate the cost of critical illness insurance.

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