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A critical illness plan offers a lump sum amount in the event the individual is diagnosed with a critical illness. Problems like heart disease, kidney failure, cancer, liver failure, bone marrow transplant and others generally come under critical illness.

Many people have misconceptions regarding critical illness plans. This might be due to inappropriate information, wrong assumptions and vague notions. Here we are going to discuss several myths and facts related to the critical illness plan. 

Myths and Facts about Critical Illness Plan

#Myth 1: Disability is covered under critical illness by insurance companies

Fact: Disability and Critical Illness are different concepts. Under disability cover, compensation for the loss of income is covered because of the accidental disability. On the other hand, critical illness provides a lump-sum payment in case the insured is diagnosed with a critical illness.

#Myth 2: Critical illness plan is the same as a health insurance plan

Fact: Critical Illness plan is an add-on cover attached with a basic health insurance plan. The health insurance plan offers financial assistance in the form of a lump-sum amount to pay off hospitalization expenses, medical bills and others. On the contrary, a critical illness plan provides a lump-sum amount only if the individual is diagnosed with any critical illness.

#Myth 3: Buying a critical illness plan at a younger age is useless

Fact: Critical illness can strike you at any day and age. In today’s era, many youngsters are diagnosed with critical illnesses because of an unhealthy lifestyle, smoking habits and stress. Purchasing a critical illness plan will always prove to be useful in the time of need.

#Myth 4: Critical illness plan offers coverage against all critical illnesses

Fact: Many individuals believe that one critical illness plan provides coverage against all critical illnesses. Well, that’s not true because most of the critical illness plans only cover a list of critical illnesses. You need to check the respective policy brochure to know more about it. 

#Myth 5: Critical illness plans have high premiums

Fact: The premium of a critical illness plan depends upon the insurer you opt for. If you are purchasing a policy that covers later stages of critical illness, then you might have to pay higher premiums to avail enhanced coverage. 

#Myth 6: I can’t buy a critical illness plan if there is a pre-existing medical condition

Fact: Critical illness plan differs from insurer to insurer. Individuals can avail such plans if there is a pre-existing medical condition. Some of the insurers may ask for a pre-medical screening. If you are diagnosed with a critical illness during a pre-medical screening, then you have to pay higher premiums to get insured.

#Myth 7: When diagnosed with a critical illness, I’ll get the money immediately

Fact: The claim settlement ratio of the insurer plays an important role in the reimbursement of claims. The higher the claim settlement ratio, lower will be the time taken to settle the claims. Before availing any critical insurance plan, read the terms and conditions of the health insurance policy along with the CSR of the insurer.

#Myth 8: I have critical illness insurance that covers cancer. I’ll get cover for all types of cancer

Fact: Not all insurance companies offer coverage against all types of cancer. Some companies only cover against minor stages of cancer. It is suggested to read the policy document to know what types of cancer are covered under the insurance policy.

#Myth 9: After availing critical illness plan, I need to purchase a life insurance plan because of the lower chances of survival

Fact: If one of your kidneys fails, there are high chances of your survival and recovery. The same goes with a heart attack as well. Critical illness plan comes with adequate insurance coverage, wherein it is not necessary to purchase a life insurance plan in the long run.


Today, our life is full of stress and responsibilities. That makes us more vulnerable to critical illnesses. To safeguard our finances and avail the best treatment, we should invest in a critical illness plan. Before doing that, individuals should clarify all the myths and misconceptions regarding the plan to avoid the blind spot.

Naval Goel is the founder of He is an Associate Member of the Indian Institute of Insurance`, Pune. He has been authorized by IRDA to act as a Principal Officer of Insurance Web Aggregator.
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