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Critical illness is something on which most people freak out. But there is a solution for everything, so as this critical illness is. Insurance companies have made it a bit less panicking for the patient and his/her family by offering a critical illness cover along with a health insurance policy.

The effect of critical illness on a human body-mind cannot be put into words. And additionally, not only the body but even finances suffer severely as well. It can put the patient and his/her family in a financial crisis if (s)he doesn’t have a sound investment plan. This is the reason for considering an investment in a good critical illness plan, a smart decision.

What Does Critical Illness Mean

Critical illness refers to be a life-threatening disease that can make your life stuck. However, critical illness insurance policy is the answer to deal with such life-threatening conditions successfully. Insurance companies that deal in critical illness insurance policy offer benefits in the lump sum in case of any critical disease which is liable to get the cover under the same.

Apart from this, it is always important to read the fine print as a single misunderstanding can end up in rejection or wrong assumptions. This is because, in India, there are several misconceptions are going around the critical illness insurance plans as many people do not read the policy’s document thoroughly. To understand that what your policy covers and whatnot, you must check the policy’s document.

Few points that are important to get cleared before purchasing critical illness insurance:

  • The rise incidences of critical illnesses
  • The way a critical illness plan help
  • The difference between a critical health insurance plan and a basic health insurance
  • The benefits of a critical insurance plan

Importance of Critical Illness Insurance

There is no doubt in saying that a patient suffers a lot because of any sickness or disease. A single case of such a life-threatening disease is enough to shatter the family of the insured both emotionally and financially as well. And this usually happens because of the expensive treatment of the same. To deal with such a situation, you must invest in an effective critical illness policy. It helps you with financial protection whenever you need it to deal with the expensive cost of the treatment.

No Particular Age of Buying Critical Illness Insurance: As we know, any illness does not knock on anybody’s door considering his/her age. Specially which can be seen in numerous youngsters are being diagnosed with critical illnesses due to several factors including lifestyle and unhealthy food habits, stress at work, etc. So, there is no particular age of buying critical illness insurance.

Difference Between Critical Illness Insurance and a Mediclaim: As we know the basics of a mediclaim policy that is it only covers your hospitalization expenses when they are admitted for more than 24 hours. On the other hand, a critical illness insurance plan provides a lump sum amount when you are diagnosed with a critical illness like heart disease, cancer, etc. For instance, if a policyholder has a critical illness plan worth Rs 12 lakh coverage, a lump sum amount of 4.5 lakh will be paid to him/her on the diagnosis of minor critical illness. In the case of diagnosis, the entire amount will be paid, irrespective of hospital bills.

Important Aspects of Critical Illness Insurance: After deciding on to have a Critical Illness plan, it is important to evaluate what’s on offer. Here are few checkpoints an applicant should consider:

The Survival Period of the Policy: Generally, with an effective critical illness policy, you get a survival period of 30 days. Some companies might extend it 30 days further but that totally depends upon the diseases. with the same, it is understandable that the insured should survive for 30 days post-diagnosis to claim for the amount.

Total Ailments Covered by the Policy: To check the total critical ailments covered by the policy is one of the first things ya one needs to consider before opting for any critical Illness insurance. For instance, some plans cover eight critical ailments and few other covers as many as 20 major illnesses. Therefore, it’s recommendable to properly research the plans before finalizing on one.

Pre-existing Disease(s): After a waiting period of 48 months, some plans will cover any pre-existing diseases, while there are some other plans as well that do not cover them at all. So, the applicant needs to do a careful assessment of what’s covered in the pre-existing clause.

Free-look: To review the decision made by policyholders, normally an insurance company provides a free-look period of 15 days. Hence, if (s)he finds that the plan is not enough to go well with the needs, (s)he can request for cancellation as well and will get the subsequent refund amount.

Tax Benefit: The policyholder can avail the tax benefit on the premium (s)he pays towards the premium, according to the Income Tax Act, 1961.

How to Choose the Best Critical Illness Insurance

Here are a few factors penned down by PolicyX that an applicant needs to keep in mind to select the best critical illness insurance:

Coverage: Investing in a  plan with maximum benefits and wider coverage always makes sense. It is important to check the number of policies which are liable to get the coverage under the chosen plan. It is said that the more the number of coverage, the better will be the policy.

Survival and Waiting Period: Normally, with a  critical illness policy, you get survival of 30 days. A waiting period of around 90 days will be there from the beginning of the policy. Additionally, there will be a waiting period for the person with pre-existing diseases and that can be around 4 years. It is always advisable to go for a plan that has limited survival and waiting periods as well.

Sum Assured: It is advisable to go for a plan which offers high sum assured the policyholder.

Incurred Claim Ratio: The applicant should check the claim settlement ratio of the company as it is one of the vital things to look for when taking a decision associated with critical illness insurance policy

Exclusions of Critical Illness Insurance

Every policy and insurance company carries its own terms and conditions. The same is with the critical illness plan. Here is a list of few of them:

  • Critical illnesses attributed to congenital diseases
  • Critical illnesses that take place because of alcohol or drug use/misuse/abuse
  • Critical Illness caused due to any cosmetic and aesthetic and obesity-related treatment
  • Self-inflicted injury termed as critical illness
  • Human Immune-deficiency Virus (HIV) infection termed as critical illnesses

Required Documents for Critical Illness Insurance Plan

Here is the; list of documents required for applying for a critical illness insurance plan:

  • Age proof: Driving license, School/college certificate, Passport, PAN card, Birth Certificate, any of these can be considered as age proof.
  • Duly filled proposal form 
  • Address proof: Bank account statement, Electricity bill
  • Income proof
  • Identity proof: driving license, PAN card, Voter ID, or Aadhar card can be used an identity proof.
  • Required Documents for Making a Critical Illness Insurance Policy Claim

The mentioned document should be submitted to file a claim

  • A duly filled and signed claim form
  • Medical Certificate 
  • Discharge card or death summary 
  • Consultation letter and  prescriptions
  • Know your client doc (KYC)
  • A copy of an FIR in case of an accident
  • Pharmacy Bills along with prescriptions

Top Critical Insurance Policies

Policy name

Sum assured

Yearly premium

Waiting period

Survival period

Illness covered

Bajaj Allianz Critical Illness

Rs 10 lakh


90 Days

30 Days


Reliance Critical Illness

Rs 10 lakh


90 Days

30/60/90 Days depending upon the illness


HDFC Critical Illness

Rs 10 lakh


90 Days

30 days


Apollo Optima Critical Illness

Rs 10 lakh


90 Days

30/60/90 Days depending upon the illness


SBI General Insurance Critical Illness

Rs 10 lakh


90 Days

28 Days


Myths and Facts About Critical Illness

Here are a few myths and the true facts about critical illness penned down by PolicyX:

  • Myth: Disability is also covered under critical illness by insurance companies.

Fact: Disability and critical illness both are different conditions. The insurance companies also make it very clear by the pattern of payment is offered in both the conditions. The disability coverage provides compensation for the loss of income because of the disability itself, whereas, critical illness insurance offers a lump sum payment in case the insured is diagnosed with a critical illness, such as cancer, immunological disease, etc.

  • Myth: Once a critical illness plan is brought, it covers all kinds of critical illness.

Fact: While is it quite obvious, but still many people live with this misconception, that one critical insurance plan covers all types of critical illness. It is important to understand that a critical illness plan covers only those illnesses that are stated in the fine print, that is the documents of the insurance plan. Therefore, we suggest you go for a careful reading of the fine print of the plan. However, a good plan covers you for critical illnesses like cardiac arrest, cancer, angioplasty, stroke, kidney failure, paralysis, liver cirrhosis, organ transplant, brain surgery, etc.

  • Myth: The claim amount will surely be received when the policyholder is diagnosed by any critical illness.

Fact:  As mentioned above, it is important to read out the insurance papers carefully. Each critical illness has some definition according to the insurance company’s policy. So it is quite natural that if the policyholder’s condition fits in the definition, (s)he will definitely get the compensation.

  • Myth: If diagnosed with a critical illness, the policyholder has to buy a life insurance plan as well because of the low chances of survival.

Fact: If the policyholder buys adequate insurance coverage, (s)he is most likely won't need life insurance. Let’s understand this better with an example, like, a person diagnosed with cancer has a life expectancy of more than five years and in case a person diagnosed with a heart attack, there is more than 90 percent of people survive and recover. So, it differs in the case of each critical illness.

  • Myth: A critical illness plan covering cancer, it covers all types of cancers.

Fact:  Though this is not applicable in all cases, the policyholder should be clear on the coverage offered by his/her chosen critical insurance plan. The reason for insurance premium varying from plan to plan is that every cancer type is different and may need different insurance coverage. Many minor and major cancer conditions are covered by a critical illness insurance plan, including liver cancer, breast cancer, colorectal cancer, kidney cancer, etc. However, there are certain exclusions to watch out for, like skin cancer, early-stage prostate cancer, early-stage chronic lymphocytic leukemia, etc.

  • Myth: If diagnosed with a critical illness, the policyholder with getting the money immediately.

Fact: It depends upon the plan to plan and insurer to insurer. The policyholder should read the policy documents carefully. Also, before buying any policy, the claim settlement ratio of the insurer is also something that should be considered.

Myth: Any person having a pre-existing medical condition cannot buy a critical insurance policy.

Fact: The thing that is great about critical illness is that it is available in all sizes as per the needs of the customers. However, With most of the insurance companies and policies, the customer might have to go through a medical test. Those who have a pre-existing disease might have to pay a higher premium to get insured.

  • Myth: Every critical illness insurance plan comes with a higher insurance premium.

Fact: This is completely untrue that all critical insurance comes with a higher insurance premium to blast its buyer’s pocket. It is suggested by us that before anyone pots for any plan and pays for the same, (s)he should always compare various health insurance plans so that (s)he can choose the best suitable one hoe himself/herself. Although it is obvious that if anybody wants to buy a plan that covers the later stages of a critical illness, (s)he will have to pay a higher premium for enhanced coverage.

The Statistics of Critical Illness in India


  • Cancer kills nearly three deaths every two minutes
  • The age group between 30-69 is the one with the maximum number of cancer death
  • Nearly 1.23 million new cases of cancer are registered every year
  • The increase in cancer cases expected by the year 2025 is five times
  • Per chemotherapy cycle can cost between- Rs 60k to Rs 1.9 lakh


  • At 23 percent, India tops the chart for the world’s most heart failure deaths
  • Nearly 900 individuals under 30 die due to heart disease every day in India
  • Nearly four individuals die every minute due to a heart attack in India
  • The age group of 30-50 are the most common death by a heart attack
  • Bypass surgery can cost between- 1.9 lakh to 6 lakh


  • Nearly 17 people in every hundred suffer from any form of kidney disease in India
  • 17 percent of Indians are suffering from some form of chronic kidney disease
  • 30 percent of diabetics develop kidney disorders
  • The monthly cost of dialysis sessions for the kidney-related disease is Rs 24k to Rs 25k


  • Every year in India, over 10 lakh new patients are diagnosed with Liver Cirrhosis
  • Every one in five Indians may get affected by liver disease
  • Cost of a liver transplant can range between Rs 25 lakh to Rs 35 lakh


  • Nearly 1.8 million people suffer from stroke every year
  • According to data by WHO, over 6.5 lakh individuals die due to stroke
  • Incidences of first-ever stroke onset below 40 years of age- 15 percent -30 percent

In a nutshell

To sum up the whole write up, we can say that one should always clarify his/her assumptions and misconceptions about the coverage provided by the policy so that there is no confusion left behind. The experts of the field and we, PolicyX suggest buying a critical illness insurance plan if the critical disease is hereditary. But most importantly, do not just buy the first plan that comes across while a google search. Analyzing the insurance expectations and comparing all the insurance plans that drew the attention would be a smart thing to do. Do not hesitate in buying a critical illness insurance plan. Meanwhile, we can say that the premium could be on the higher side, the benefits are totally worth owning it. Also, when we talk bluntly about buying a health insurance policy, one size doesn’t fit all, as it is because insurance expectations of people are different.

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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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