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Critical Illness Insurance: Everything You Should Know

Critical Illness Insurance: Everything You Should Know
November 16, 2023


Critical illness insurance provides a lump-sum payment in-case the policyholder is diagnosed of a health related condition of a serious nature. Some of these common critical illnesses include:
  1. Heart attack
  2. Cancer
  3. Paralysis
  4. Coronary artery bypass surgery
  5. Major organ transplant (e.g. heart, lung, liver, pancreas)
  6. Stroke
  7. Kidney Failure

What is Critical Illness Insurance?

Critical illness insurance, is a product in which the insurance service provider makes a lump sum payout to the policyholder on diagnosis of a specific illness on a predefined list as part of the policy

Understanding Critical Illness Insurance Cover & Riders

They are commonly referred to as riders and are contingent on the occurrence of an event like a critical illness.

What is critical illness?

Critical illness is a health related condition of a serious nature. It can have a debilitating effect on the individual's lifestyle and can incur considerable treatment cost, apart from loss of income from inability to work.

Who can benefit from the critical illness policy/rider?

The critical illness policy/ rider can be particularly beneficial for individuals who wish to take no chances with certain health conditions, especially if they have a medical history. Also primary breadwinners of families who can ill-afford a hit on their finances from a critical illness critical illness insurance policy The health plan can provide financial security at a time, when the individual would be hard pressed for funds to treat the illness and support his family at the same time.

How to safeguard against critical illness?

A definite way of circumventing the financial loss and inconvenience of a critical illness is by buying a health plan from a life insurance company or taking a critical illness rider on a life insurance policy. If the individual is diagnosed with one of the critical illnesses specified in the critical illness rider, he will receive a lump sum payment within a specified number of days. The amount equals the sum assured for the critical illness insurance rider and is different from the basic sum assured/life cover disbursed on death or maturity. The critical illness insurance amount is disbursed whether or not the insured undergoes any treatment. Some insurers as defined by the policy terms and conditions, disburse the amount towards the critical illness rider over and above the sum assured. Other companies deduct the disbursal proceeds from the sum assured, which stands revised post-disbursal.

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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