What is Critical Illness Health Insurance?

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Critical illness insurance is a type of health insurance policy that provides coverage for critical illnesses or life-threatening diseases, such as cancer, heart attack, stroke, kidney failure, paralysis, etc. It provides a lump sum payout if you are diagnosed with a critical illness covered under your policy, irrespective of the actual cost of treatment.


Additionally, you can get critical illness coverage as an add-on to your current health insurance plan or as a stand-alone policy. Apart from treatment costs, the payout from such plans can be used to cover recovery expenses, household expenses, debt, and more.


What are the Key Features of a Critical Illness Insurance Plan?


Take a look at some of the key features of critical illness insurance plans:



  1. Major Illness Coverage: Critical illness plans provide coverage for a variety of serious illnesses, such as cancer, heart attacks, strokes, kidney failure, brain surgery, and more. Some plans cover up to 100 critical illnesses, while the exact number varies from insurer to insurer.

  2. Lump Sum Payout: If you receive a diagnosis of a designated serious disease for the first time, the insurer will pay you a lump sum. The insured can use the funds to cover treatment costs, recovery expenses, and more.

  3. Waiting Period: Most critical illness insurance plans have a 90-day waiting period. You cannot submit a claim if you do not complete this waiting period. The waiting time, however, could differ depending on the plan.

  4. Survival Period: Most critical illness plans also include a 30-day survival period. The insured can only be eligible for the payout once they successfully live past the survival period.

  5. Single Claim Policy: You are only permitted to submit one claim under a critical illness insurance policy. Following your initial claim, your insurer will pay the full sum insured. Therefore, the policy will expire when the payout is paid.

  6. Hassle-free Claim Process: Claiming a critical illness insurance policy is hassle-free. Most insurance companies require basic medical documents, such as diagnosis reports, doctor's prescriptions, etc., for verification and process the claim quickly.


What Illnesses are Covered by Critical Illness Insurance?


Critical illness insurance plans cover a wide range of health conditions. Some of the common ones are



  • Cancer of specified severity

  • Stroke resulting in permanent symptoms

  • Kidney failure requiring regular dialysis

  • First heart attack of specified severity

  • Open-chest CABG

  • Major organ transplant

  • End-stage liver disease

  • Permanent paralysis of limbs


These are just a few of the many instances. The diseases covered can vary by insurance company and by policy.


How Does Critical Illness Insurance Work?


Here is a short overview of how critical illness health insurance works:



  • An individual (insured) buys critical illness health insurance as a stand-alone plan or an add-on and pays premiums regularly.

  • He/she is diagnosed with one of the critical illnesses listed in the policy.

  • The insured raises a claim to the insurer and successfully survives the survival period.


The insurer disburses a lump-sum payout in accordance with the policy documents.