Critical illness insurance essentially provides the funds to pay for medical treatments of people with life-threatening or critical diseases. Financial coverage can help pay for cancer treatment, tumor removal, etc.
Critical Illness Insurance
The primary benefit of critical illness insurance is that it pays out when the policyholder is diagnosed with such an illness. Additionally, some insurers have policies catering exclusively to women. It provides similar coverage for health and medical issues that primarily affect them, including breast and ovarian cancer.
Common Characteristics of Critical Illness Insurance
Policyholders can claim critical illness insurance benefits at the end of the waiting period specified in the policy. However, this period typically lasts 30 days after diagnosis and is also called the survival period.
Critical illness insurance is a benefit-based plan that grants the policyholder a lump sum. Alternatively, unlike other insurance policies, it doesn’t impose restrictions on the funds, nor are they mobilized. Most such plans also don’t require the policyholder to get health check-ups until they reach 45.
Critical Illness Insurance Exclusions
Some illnesses aren’t covered by critical illness insurance, even if they are life-threatening or critical. Thus, there are some exclusions in these conditions under such policies are:
- Critical illnesses resulting from alcohol or substance abuse
- Illnesses or medical conditions that aren’t in the insurance policy
- Health conditions resulting from pregnancy or abortion
- Mental health issues and psychological or psychiatric disorders
- HIV or AIDS-related treatments
How Critical Health Insurance Benefits Policyholders
Critical illness insurance can be invaluable for ensuring the peace of mind of policyholders facing critical illnesses. Additionally, not worrying about the cost of treatment can be a significant benefit for many.
The Benefits
Here are some of the benefits that policyholders can expect from a critical illness policy:
1. Tax benefit.
Critical illness policyholders are eligible for tax benefits or deductions under the Income Tax Act’s Section 80-D. Also, it applies to the premium and is similar to the tax benefit offered by standard health insurance policies. The actual amount varies at different times.
2. Combined Benefit.
Some policyholders may opt to purchase critical illness insurance in conjunction with their primary insurance plan rather than a standalone policy. Likewise, anyone can combine a critical illness package with the basic plan in such cases. Consequently, policyholders may receive a reimbursement that a critical illness plan wouldn’t otherwise cover.
3. Fixed-benefit coverage.
Critical illness insurance comes with fixed-benefit coverage for distressing situations. It is claimable after the policyholder is diagnosed with a life-threatening disease.
4. Income Replacement.
Critical illness insurance may provide funds that compensate for the policyholder’s inability to work after being diagnosed with a critical illness. These funds are valuable for daily expenses, debt repayment, or other medical expenses.
5. No-Claim Bonus.
In some cases, policyholders may opt not to file a claim even after diagnosing a critical illness. In such cases, insurers may grant a “no-claim” bonus. Conversely, it can look like discounted premium rates or an increase in the coverage amount. These bonuses are similar to those provided by health insurance policies when the policyholder doesn’t make a claim.
6. Post-Diagnosis Purchase Coverage.
In some cases, insurers may provide existing policyholders with critical illness coverage after the condition receives a diagnosis. Then, these can sometimes entail higher premium costs.
7. Overseas Treatment.
Finally, critical illness policies cover policyholders for treatment expenses they incur in countries other than their country of origin.
Conclusion
Critical illness insurance may provide coverage that other insurance plans do not. While life insurance ensures dependents’ financial security after the policyholder passes, critical illness protects policyholders while still living.
These policies can free policyholders from the financial burden of getting treatment for chronic and acute illnesses. However, in some cases, they may even cover policyholders’ lost income if they cannot work due to their condition. While most other insurance policies are beneficial after the fact, critical illness insurance can benefit policyholders while they are still alive and dealing with their health issues.
About Provident Insurance Programs
With roots dating back to 1902, Provident Insurance Programs is a program administrator that serves paid and volunteer firefighters in addition to emergency medical responders with numerous custom-tailored insurance programs. We’ve also extended our expertise and experience to offer benefit plans and coverages to participant groups as well as Transportation Benefits. We are committed to continuing to provide superior customer service, and would be happy to speak with you to provide further information. Give us a call today at (855) 201-8880 to speak with one of our representatives.