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What Is Critical Illness Cover In Health Insurance

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What Are Critical Illness Policies

Critical Illness Insurance – Explanation and its benefits

A critical illness insurance cover provides a lump sum benefit to cover the cost of care and treatment arising from specific illnesses and the associated recovery expenses. Further, if you are left with a surplus, you can then use it to pay off debt like loan EMIs. Critical illnesses include cancer, heart/kidney ailments, among others.A critical illness cover lapses once the payment is made by the insurer. Typically, the lump sum amount is paid to the policyholder post survival period of 30 days after contracting the illness. You can buy more than one critical illness cover and each of these policies will pay for the critical illness. You can buy a critical illness cover with both life and health policies, here’s how.

Everything You Need To Know About Critical Illness Insurance

The Association of British Insurers has confirmed that at least 92% of all critical illness claims are often paid. For cancer claims, the rate of payments is 96%. If youre battling a chronic illness, this information should interest you.

Critical illness insurance is one of the essential coverage that individuals take to provide financial security in a case when they suffer serious illnesses. It has more benefits than the typical health insurance.

Are you suffering from a critical illness? Its probably time to consider critical illness insurance. Heres everything you need to know about this insurance.

Medical Insurance May Not Be Enough Critical Illness Insurance Can Help

In todays market, your employees are likely experiencing rising deductibles every year. The out of pocket costs from a major critical illness such as a heart attack, stroke, or cancer can be financially devastating.1

AF Limited Benefit Critical Illness Insurance is designed to pay a lump-sum benefit directly to your employees if theyre diagnosed with one of the life-altering illnesses covered in the critical illness group policy. They can use these benefits to help pay for deductibles, copayments, aftercare, everyday living expenses, or even lost income while theyre away from work recovering.

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What Exactly Is Covered

There are a number of different flavors of critical illness policies, which will affect the size of your monthly premiums. You might encounter a cancer-only option or one that covers a handful of common health events, like cancer, heart attack and stroke or a much broader one that might address 10 or 20 different conditions, sometimes even Covid-19 in newer offerings.

Keep in mind that if you have an existing cancer diagnosis, as an example, you cannot just take out a big policy and get an immediate payout.

What If I Opt Out Of Critical Illness Insurance

Critical Illness Insurance Policy

Like other forms of supplemental insurance, critical illness insurance is an option, not a mandate, and may not be the best choice for everyone. There are many other alternatives you can consider:

  • Skip the extras: If you are in your 20s or 30s and fairly healthy with no risk factors, you may not need critical illness insurance yet. You may also choose to forgo supplemental insurance if your standard health plan is very good.
  • Cancer-only plan: Unlike many other severe illnesses which are not so common, cancer affects more than 30% of people in the U.S. Some companies that offer critical illness insurance also offer a more focused cancer-only plan. This may be a good choice for you if you have a high risk of cancer.
  • Bundle plans: Some insurance companies offer the option to combine a critical illness plan with other coverages like, disability or life insurance. Bundling like this makes sense if you want to bulk up on coverages and prefer to avoid paying all those bills for so many plans.

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Factors To Help You Decide

If you are diagnosed with a critical illness you can still face financial hardship, even when you have the most comprehensive coverage. Before you purchase a critical illness plan, think about these factors:

  • What is your risk for coming down with a severe illness in the next 5 to 10 years?
  • Are other members of your family at risk of falling critically ill?
  • What does your standard health plan cover?
  • Will you be able to maintain your standard of living if you can no longer work?
  • How can you best prepare for surprise costs that you can’t predict?

What Is Excluded From Coverage

Each policy may outline different exclusions. Most will not cover a critical illness youve been diagnosed with in the past year or even lifetime. Others may not cover non-invasive cancers.

Also, there are potentially some injury-related critical illnesses, such as amputation or loss of vision. Your insurance company will not typically pay out benefits if you were engaged in illegal activity at the time of the injury or if the injury was the result of self-harm.

Each company will issue an explanation of benefits document that should include a description of exclusions and policy limitations. If you have additional exclusion-related questions, contact your potential critical illness insurance company.

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Difference Between Health Insurance & Critical Illness Insurance Policy

Learn about the differences between health insurance and critical health insurance policy at

Many of us assume that Health Insurance and Critical illness Insurance are one and the same. But, the reality is, they are not! Lets see how similar or different they are from each other in this two minute read.

A lazy Sunday afternoon I was all puzzled about how to get my laptop issue resolved on my own. A little knowledge being harmful, as they say I decided to take the help of my neighbour who works in an IT firm. While he started giving me his gyaan about the antivirus bit, we spoke about certain other topics too.

Insurance, being the most boring topic, yet an important one my neighbour asked about my opinion about buying a health insurance plan as well as a critical illness insurance or a combo of both.

I decided to resolve this dilemma for my neighbour with the help of my expertise being from the insurance niche.Heres what I told him

There is a huge difference between the health insurance and critical illness insurance, simply because, each one of them serves a unique requirement.

What are the similarities or differences between each other?

Here, we strike out the major differences between health insurance and critical illness insurance:

Health Insurance Claim Process

What is Critical Illness Insurance?
  • A health insurance policy can be claimed in two ways. The policyholder can either file a cashless claim or a reimbursement claim.

  • Cashless claims can be made if the treatment is availed from a network hospital i.e. the insurance company is affiliated with a particular medical facility.

  • On the other hand, a reimbursement claim can be made after making the payment of hospital bills.

  • The policyholder needs to submit the bills and receipts to the insurance company for approval along with a duly filled claim form.

  • If the claim is approved, the policyholder will be paid the claim amount. The list of required documents can be taken from the insurance company.

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Shop And Compare Before Purchase

You will be surprised to see a huge number of health insurance plans available in the Indian market today. There are plans for critical illness, individual health insurance, family floater plans and more. Refer to the link here to know more.

You might need to buy separate health insurance plans for yourself or your family. This is better illustrated by the following example-

Mr A lives with his spouse, children and aging parents. He needs to have the right insurance coverage to ensure he is financially backed-up in event of sudden medical emergencies. So, he might need to insure himself first with a health insurance policy as he is the sole breadwinner of the family, a critical illness health insurance plan for one or both of his parents and a family floater plan to insure his wife and kids. There are some insurance plans that offer maternity benefits as well.

Are Critical Illness Insurance Policies Right For You

By Chris Taylor

5 Min Read

NEW YORK – It is annual enrollment time for company benefits in the United States, and for many employees, the process can be as perplexing as deciphering ancient cuneiform tablets.

Well, now there is something else you have to figure out: Critical illness insurance coverage. Basically a voluntary add-on to your major healthcare plan, it has been showing up as an option on more and more benefits menus. In 2019, 62% of large firms offered it, up sharply from 46% just two years prior, according to an employer survey by the Kaiser Family Foundation.

Critical illness policies provide lump-sum payments in the event of a serious health diagnosis, typically cancer or heart attack or stroke. So, in exchange for monthly premiums in the region of $25-$50, you could be eligible for a potential benefit such as $10,000 or $15,000 or $25,000, depending on your particular policy.

The obvious question: Doesnt my comprehensive health plan already cover critical illness? Well, yes to an extent.

But if you are in a high-deductible plan, for instance, you are responsible for out-of-pocket costs. For the 2021 plan year, the Affordable Care Act limits out-of-pocket expenses for marketplace plans at $8,550 for individuals, or $17,100 for families.

A critical-illness plan could help bridge that gap. The lump sum can also cover any manner of non-medical expenses, including your mortgage or rent if your health condition hampers your ability to work.

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Critical Illness Claim Process

  • The policyholder can raise a claim against a Critical Illness cover if he/she is diagnosed with any of the listed illnesses. After the end of the survival period, get in touch with the insurer.

  • Duly fill the claim form and attach it with the other required documents.

  • The insurance company will verify these documents and if the claim is approved, you will receive a lump sum amount.

  • One can use the claim amount to avail treatment for a critical illness.

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How Is Critical Illness Insurance Different From Disability Or Life Insurance

Benefits of Critical illness Insurance in India

Critical illness insurance pays a lump-sum tax-free benefit when you or your dependents are diagnosed with a life-changing critical illness, under a variety of conditions. In contrast, disability insurance generally covers only lost employment income due to an accident or illness until you are ready to return to work. Life Insurance is paid to beneficiaries when a covered individual loses their life. In effect, Critical Illness insurance bridges the gap between Disability and Life Insurance.

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Why Should You Buy A Critical Illness Insurance Plan

A critical illness# plan is critical nowadays. A few days of being sick can lead to exorbitant hospital bills, making it hard to maintain a favourable standard of living. With a critical illness insurance plan, you can rest assured that your loved ones will not struggle to meet hospital expenses, doctor√Ęs fees, and other expenses. The payouts on the diagnosis of disease are instantly credited to you and can be used to cover varied costs.

Low Cost Limited Coverage

Part of what makes these policies appealing is that they generally dont cost much, especially when you get them through an employer. Some smaller plans run as little as $25 a month, which looks like a bargain compared to the cost of a typical, low-deductible health insurance policy.

Despite these plans low price tag, some healthcare experts are skeptical as to whether they really are a good deal for consumers. One overarching concern is that theyll only reimburse you for a somewhat narrow range of illnesses. If the illness youre diagnosed with doesnt fit the definition of a covered illness, youre out of luck.

The more illnesses that are covered on your plan, the more youll pay in premiums. A 45-year-old female with an individual, cancer-only plan may pay $40 a month for $25,000 of coverage. That same woman may pay twice that a month if she expanded the coverage to include coronary illnesses, organ transplants, and certain other conditions.

Seniors should be particularly careful about these policies. There may be limits for payout on some policies, with persons over a certain age ineligible for payment, or they may include so-called age reduction schedules, which means your potential insurance payout shrinks as you get older.

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Whats The Most Common Critical Illness Claim

Most of the claims we get are for cancer, and we often speak to people claiming for heart attacks, strokes, multiple sclerosis, benign brain tumours and Parkinsons.

But everyones different, and we cant predict the future. Thats why we cover as many as 53 illnesses, which are listed in the Critical Illness Plan policy summary .

Cancer Insurance Plan Vs Critical Illness Insurance Plan: Which Is Better

What is Critical Illness Insurance?

The choice between a cancer insurance plan and critical illness insurance plan depends mostly on the medical condition of the policyholder. A critical illness health insurance plan covers a wide range of critical diseases while a cancer insurance plan compensates only for the cancer disease. Therefore, if you are looking for an extensive plan that can cover you for different critical diseases then a critical illness plan is a good choice. If you are looking for a cancer specific plan, then cancer insurance covers are a wise choice for you.

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What Is The Typical Claim Process For Critical Illness Insurance

Unlike indemnity based health plans or usual health insurance plans, critical illness insurance will not make multiple claim payments. Once you are diagnosed with any of the critical illnesses and your insurer approves your claim depending upon the coverage of the policy mentioned you get the entire sum insured in one go without submitting any bills to show the expenses made as per the sum insured. Your policy then gets closed and will not continue in most of the cases. You can use the sum insured payout for alternate income source, manage debts if any or pay for your medical bills.

Both health plans and critical illness policies are important. The benefits, inclusions, and exclusions under both these types of insurance plans are different. So it is advisable to avail of both options to avoid any financial distress in the future.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales

Best For Individuals: Mutual Of Omaha

Mutual of Omaha

Why We Chose It: Mutual of Omahas critical illness policy benefits individuals who need a high-deductible insurance filler.

  • Customizable policies that fill the gap for high-deductible health insurance

  • Quotes not available online

Mutual of Omaha offers its critical illness insurance policy to individuals, families, and employees. The individual benefits stand out as especially strong. The company advertises its policy as an excellent option for individuals with high-deductible insurance policies. The lump-sum payment received from Mutual of Omaha could help cover costs until a person meets their high deductible, which can sometimes number in the $10,000 range.

Mutual of Omahas critical illness policy covers conditions such as internal cancer, heart attack, stroke, Alzheimers disease, major organ transplant, blindness, paralysis, deafness, or kidney failure. They also pay 25% of the lump sum for coronary artery bypass surgery or coronary angioplasty surgery. Their policy coverage options range from $10,000 to $100,000.

Mutual of Omaha has an A+ or Superior financial strength rating from AM Best.

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What Are The Benefits Of Our Critical Illness Insurance

Critical illness insurance pays you directly in cash without any deductible or extra waiting time after your claim is verified.

The money you receive from your critical illness insurance can be used however you want, covering anything from medical costs to non-medical costs like your monthly rent.

Our plans have you covered for the long term, paying you a lump sum of $1,000 to $50,000 when youre first diagnosed with a critical illness. If you ever receive a second diagnosis, well still be there for you, offering a lump-sum payout of $500 to $25,000.1

With the right plan, you may have access to additional wellness benefits for preventative services. We also offer a hospitalization admission benefit of up to $5001 a day should you end up in the hospital for a non-critical illness or injury.

Which Illnesses Are Covered

Why do I need Critical Illness Insurance

Its important to understand that critical illness policies dont cover all illnesses.

We cover a range of conditions, including all standard conditions set out by the Association of British Insurers , including Alzheimer’s disease, heart attack, stroke, and some types of cancer.

We also offer cover for children at no extra cost, and can provide cover for additional conditions, to give you even more protection.

Take a look at our policy summary for a full list of the conditions we cover.

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Simplified Critical Illness Insurance

Simplified critical illness coverage is available with a questionnaire in place of a medical. Coverage caps out at around $150,000.

Not every company offers simplified critical illness insurance plans. We are aware of 11 companies who have these plans, which typically cover fewer illnesses but at least the Big 3 . As mentioned earlier, these plans ask a few questions and require the applicant to be able to answer no to all of them, or perhaps a subset in order to qualify.

Here is a list of providers who offer these plans with a few key data:


It is important to understand that the cost for the same amount of coverage will be the highest with guaranteed critical illness insurance.

How Is Critical Illness Insurance Different From Other Plans

Medical bills can be some of our largest expenses. A report by Salary Finance reveals that 32 percent of working Americans have outstanding medical debt, and 54 percent of people with medical debt have defaulted on it.

Medical insurance only goes so far in covering costs to treat a critical illness, like a stroke1 or heart attack, and disability insurance helps replace some of your pre-disability income while you recover. So, how do you pay for the expenses that medical insurance and disability insurance do not cover?

This is where critical illness insurance can help. It pays a lump sum of money directly to you to use on anything you want. Keep reading to learn more about critical illness insurance, and why it might be a smart addition to your health and financial planning.

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