What is critical illness insurance? Why do you need it?

Over the last few decades, India has made phenomenal economic progress and has emerged as one of the significant economic powers in the world. This growth has been accompanied by some emerging trends on the healthcare front. In today's fast-paced lifestyle, health often takes a back seat; the pursuit of ambitious professional goals has led to heightened stress levels amongst the population. India is witnessing an alarming increase in non-communicable/lifestyle diseases like heart disease, diabetes, hypertension, and chronic respiratory disorders, to name a few. As per a recent report by The Lancet Diabetes & Endocrinology journal, about 11% of Indians have diabetes, and over 35% suffer from hypertension. To reverse this worrying trend, there is a growing impetus on wellness and preventive health care. People are increasingly recognizing the importance of prevention and timely detection of ailments and how the same helps in better recovery and even saving lives. Insurers, too, understand the role preventive care can play in fighting chronic illness better, resultantly today industry offers products that encourage people to stay healthy and take preventive health check-ups. Such products also cover Diet and Nutrition Consultations, Doctor Consultations, Pathology Tests, and Mental Well-Being Consultations, to name a few. However, given the rise of NCDs in the country, just having a wellness rider might not suffice; it is prudent to have a policy that covers critical illness.

- By Mr. Bhaskar Nerurkar

What is a critical illness cover?As the name implies, the policy covers serious and life-threatening ailments like cardio-vascular diseases, cancer, neuro conditions, and related issues, to name a few.

Unique features: Critical illness insurance is a benefit policy, unlike a typical health insurance cover, which is an indemnity policy. When the insured is diagnosed with a critical illness, as per the policy terms, a lump sum pay-out is made by the insurer. It is important to note that the lump-sum payment does not necessitate hospitalization; being diagnosed with the disease is sufficient.