1. Critical IllnessInsurancePoliciesinIndia
Whyit isasimportantasTermLife Insurance
One day you are all fine, working hard, raring to go, having huge future plans for
your children and family. A small symptom (a simple aching of some part of the body), a
routine visit to the family doctor, a few medical tests can completely turn your life and
your family upside down.
A Critical Illness is a serious illness which can not only hamper the complete
lifestyle of the person diagnosed but also be a cause of financial trauma for the entire
family.Why? Read on…
The Good News and Bad News:
Bad News: As per medical research worldwide, with the busy sedentary and unhealthy
lifestyles we lead, the younger generations are at a much larger alarming risk of suffering
from a critical chronic ailment before we touch our 50s.
Good News: On the other hand, the way medical science and emergency care has
advanced, the chances of surviving a critical illness are reasonably high.
Bad News: Costs of Survival and maintenance could be more expensive and daunting
than even death.
Is Critical Illness riskier than Death?
Yes! Surviving a Critical illness can have a much larger impact in the long term on
the financial life of the entire family, even more than death. Here’s how:
Lower Income:
• The ailing family member may have to withdraw from a high-paying challenging
role (say a stressful leadership role), and take up a more relaxed job, which would
result in reduced income.
• Family members need to spend more time attending to this ailing family member.
An earning member (say, a working spouse) could have to curtail her work hours
and hence reduce her earnings.
Larger Expenses:
• Heavy expenses on medical treatment and investigations like specialist
consultations, expensive medicines and expensive medical tests.
• Modifications may be required to the house in certain cases. For instance in cases
where a person is bed-ridden, there would be a need to make the house wheel-
chair friendly
• No chances of upgrading your Health Insurance, as no Insurance company would
agree on the upgrade once a critical illness has been diagnosed

2. • Fixed living expenses like EMIs, Utility Bills would not stop.
As you can see above, while a death of an earning family member results in a sudden loss
of earnings and financial security in the family, a critical illness can turn out to be a larger
financial risk for the entire family.
It is therefore extremely important that you consider protecting your family against this
financial risk.
How to protect your family from risk of Critical Illness?
• Don’t ignore small sustained signals your body gives you (aches, sensations), and
get yourself thoroughly checked through good doctors.
• Take second opinion always in case of a serious health issues, signs, symptoms
• Be adequately covered for the long term under a Health Insurance policy.
• Protect your Family with a Critical Illness Insurance Policy.
How does Critical Illness Insurance Plan work?
Critical Illness insurance policy is a “benefit policy” which covers you for a fixed
lump-sum benefit as follows:
• The benefit is paid by the Insurance Company as a lump-sum, irrespective of what
costs you have actually incurred.
• The benefit is payable on diagnosis of the ailment, and does not require any
hospitalization, or any kind of treatment to be carried out.
• The benefit is paid only if you survive the survival period mentioned in the policy.
Explained later.
Note, how you use the proceeds received from the Insurance policy are not important for
you to get the lump-sum claim.You can use the proceeds as you may deem fit.
Who should buy a Critical Illness Policy?
From what we have read above, it is clear that at least every bread earner in the
family, every person who has dependants must be covered under a Critical Illness
Insurance policy. The same rules of Term Insurance apply. If one needs to be covered
underTerm Life Insurance, you also need to have a Critical Illness cover for yourself.
Should you buy a Critical Illness Rider or a Standalone Plan?
Our general observation says that riders are pretty standard and have a narrow list
of ailments covered (around 5-9). Whereas almost at a similar premium, you can get a
wider list of ailments covered (around 20) in standalone policy so it is more advisable to
have a Critical Illness Standalone policy.

3. Comparison of leading Critical Illness Policies in India:
ICICI Lombard Bharti AXA MAX Bupa Bajaj Allianz
Premium for 30
age (3L SI)
1253 1302 752 1011
Certain conditions you should know:
• Cooling-Off Waiting Period: The policy has a cooling off period when the policy starts. This
means, the policy will not pay for ailments contracted/diagnosed in this period of the policy.This
duration is generally 60-90 days.
• Survival Period: The policy requires the diagnosed patient to survive for a specific period, post
the date of diagnosis. Remember this policy is designed to cover the Survival costs. In case you
are looking to cover the risk of death before the survival period ceases, a Term Life policy would
be better suited, as a cover.
• Pre-existing diseases: are not covered. Any existing disease would not be covered. In fact, there
are chances you may not get coverage, in case you suffer from a Pre-existing ailment.