Wait Out the Initial Period
To get the coverage amount, the policyholder has to pass the initial waiting period, often 90 days from the policy start.
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What is a Critical Illness Insurance Policy?
Critical illness insurance is designed to offer financial protection to policyholders against life-threatening illnesses, such as cancer, renal failure, stroke, etc. Once the covered illness is diagnosed, the insurer pays a lump-sum benefit to help manage the financial impact of the condition.
In fact, you can get this coverage either as a standalone plan or purchase it along with your term insurance plan or health insurance policy as an add-on.
How Does Critical Illness Insurance Work?
Wondering how critical illness insurance provides financial protection? Once you purchase the policy, the coverage typically works in the following way:
Get Diagnosed
After being diagnosed with the covered critical illness in their policy, the policyholder should contact their insurer with a formal diagnosis report.
Survive the Survival Period
As the insurer assesses the claim, the beneficiary has to live through a required survival period, usually 14 to 30 days post-diagnosis.
Receive the Payout
Once the survival period ends, the policyholder will receive the fixed lump-sum amount in their bank account.
Features of Critical Illness Insurance
From offering lump-sum payout to ensuring convenient usage, critical illness insurance comes with a variety of beneficial features as discussed below.
Lump-Sum Payout
Unlike a regular health insurance policy, which only covers eligible medical expenses, critical illness insurance offers a lump-sum payout after the diagnosis. However, to keep the coverage active, you have to pay regular premiums on a yearly, quarterly or half-yearly basis.
Flexible Usage
The lump-sum payment of critical illness insurance can be used for any purpose. For instance, you can use it to cover any non-medical expense, such as paying off debt and running the household to manage your income loss while recovering.
Specific Illness Coverage
Critical illness insurance provides financial coverage only for a defined list of serious illnesses and medical conditions. Depending on the policy, this may include different types of cancer, kidney failure, heart-related conditions, stroke and major brain surgeries. However, the illnesses covered can vary across insurers.
Application Waiting and Survival Period
Policyholders have to serve an initial waiting period before diagnosis and a survival period post-diagnosis to get the lump-sum benefit. In most cases, the initial waiting period lasts 90 days, while the survival period can range from 14 to 30 days, depending on the insurer and policy terms.
Successive Claim or Termination
Critical illness insurance policies generally terminate after the insurer pays the lump-sum benefit. However, under a multi-claim policy, you may be eligible to make additional claims for subsequent covered conditions. Moreover, such policies may specify a waiting period between successive claims.
Online Policy Management
With our platform, you can easily compare critical illness insurance plans from leading providers in India and choose coverage that suits your needs. From getting personalised policy quotes online to filing claims, you can complete every step with ease.
Who Should Buy Critical Illness Insurance?
Critical illness insurance can provide an added layer of financial protection. It can be particularly valuable if you fall into any of the given categories:
People with a History of Critical Illness
Specific critical illnesses, such as cancer and kidney diseases, are hereditary in nature. Therefore, if you have a family history of such conditions, with a critical illness policy, you can manage costly medical expenses during unfortunate circumstances.
What are the Benefits of Buying Critical Illness Insurance?
By buying critical illness insurance from Pluto, you can get the following benefits:
Security from Medical Inflation
With the medical inflation rate in India around 12%-15%, it can get difficult for people to afford costly treatments for illnesses like stroke or organ failure. However, with a lump-sum payment, you can afford the best possible treatment with minimum out-of-pocket expenses.
Acts as Income Replacement
While recovering from a critical illness, policyholders may require extended time away from work. This is when the lump-sum benefit of this policy can help manage everyday expenses when your regular income is affected.
No Hospitalisation Requirement
In critical illness insurance, you can receive the entire lump-sum amount upon the diagnosis of a covered illness, without waiting for hospital discharge. This ensures you get financial support during a medical crisis without the hassle of managing multiple hospital bills and related paperwork.
Protects Your Savings
Life-threatening illnesses like cancer require long-term medical care, putting significant strain on your years of savings. However, with critical illness insurance, you can provide your family with an additional financial cushion, helping you avoid using your entire emergency fund.
Shorter Waiting Period
Critical illness insurance plans generally have a shorter waiting period than health insurance with pre-existing coverage, which typically lasts up to 36 months. This way, policyholders can have access to the amount as soon as possible during any uncertain medical emergency.
Tax Benefit
Under Section 126 of the Income Tax Act, 2025 (previously Section 80D), premiums paid for critical illness insurance can be eligible for tax deductions. However, these deductions are subject to the old tax regime.
What is Excluded in a Critical Illness Insurance Plan?
Under these circumstances, you can not claim the coverage benefits of a critical illness insurance policy:
Pre-Existing Diseases:
If the policyholder is diagnosed with a chronic health condition or has exhibited symptoms before buying the policy, coverage will not be provided.
Death Before Survival Period:
When the policyholder dies before the end of their survival period, their family can not claim the benefit for the critical illness policy.
Specific Treatments:
Surgeries or treatments related to cosmetic enhancement, dental disorders and fertility or serious pregnancy-related complications are generally not covered.
Sexually Transmitted Diseases:
The policyholders will not get coverage for chronic sexually transmitted disorders, such as HIV or AIDS.
Tax Benefits of Critical Illness Insurance Plans
With critical illness insurance, individuals can claim deductions for covering themselves, their spouse, dependent children and parents.
| Beneficiaries | Premium Limit |
|---|---|
| Individual and Family with Parents (All Below 60 years old) | ₹25,000 + ₹25,000 |
| Individual and Family (Below 60 years old) with Parents (Above 60 years old) | ₹25,000 + ₹50,000 (For Parents) |
| Individuals, Families and Parents (All Above 60 years old) | ₹50,000 + ₹50,000 |
How to Buy a Critical Illness Insurance Plan with Pluto?
Here at Pluto, buying a critical illness insurance plan is quick and easy if you follow the steps given below:
Step 1:
Navigate to our ‘Get Quote’ and enter basic details such as your name, age, date of birth, mobile number and email ID.
Step 2:
Check out the available options and select a plan that fits your treatment cost and financial needs.
Step 3:
Complete the proposal form with accurate details and submit essential documents like your KYC or income proof, such as Aadhaar, PAN and salary slips, as required by your insurer.
Step 4:
Pay the premium through a digital payout mode. Generally, within a few hours, you can get the policy documents via email.
Eligibility Criteria to Buy a Critical Illness Insurance
The table below shows the key eligibility criteria to buy critical illness insurance via Pluto:
| Eligibility Criteria | Feature |
|---|---|
| Age Limit | 18 years to 65 years, but can vary depending on the policy terms |
| Nationality | Although Indian residents are generally eligible to purchase the policy, certain insurers also offer critical illness plans to NRIs. |
| Medical Screening | Insurers may require you to undergo a medical screening before issuing the policy. |
How to File a Claim for Critical Illness Insurance?
Follow these simple steps to file a claim for your critical illness insurance via Pluto:
Step 1:
Contact your insurer immediately after the diagnosis of the covered critical illness.Step 2:
Submit the required documents, such as a claim form or diagnosis report.Step 3:
After receiving the documents, the insurer will verify the details. Moreover, they can also request any additional documents if required.Step 4:
Once all details are successfully verified, you will receive the lump sum amount in your bank account within the specified timeline.Documents Required for a Critical Illness Insurance Claim
You generally need to submit the following documents for a critical illness insurance claim:
Critical Illness Insurance Plans vs Health Insurance Plans
To avoid any confusion about the meaning of critical illness insurance and health insurance policies, have a look at their key differences.
| Parameter | Critical Illness Insurance | Health Insurance |
|---|---|---|
| Coverage Feature | Covers a specified list of conditions like heart attack, cancer and major organ transplants | Covers the expenses of medical costs related to hospitalisation, ambulance charges, and other inpatient procedures |
| Policy term | Generally has a fixed term | Can be renewed for life |
| Waiting Period | Up to 90 days | 12-36 months for pre-existing conditions |
| Payout | Lump-sum amount | Cashless or reimbursed |
| Policy Termination | Ends after first payout | Valid until the plan expires |
Frequently Asked Questions about Critical Illness Insurance
Which documents are required to buy critical illness insurance?
You can buy a critical illness insurance policy with KYC documents, income proof and existing medical records.
Can I get free online quotes for critical illness insurance?
Yes, you can get free online quotes for a critical illness insurance plan from Pluto Insurance without any hidden costs.
Can I claim critical illness insurance more than once?
No, the standard critical illness insurance policies only allow you to claim once. Therefore, after you receive the lump-sum payout, the policy typically terminates immediately.
Does critical illness insurance cover accidents?
No, critical illness insurance does not cover accidents, as it is designed to provide a lump-sum payout upon the diagnosis of covered chronic illnesses.
Is critical illness helpful if I already have health insurance?
Yes, critical illness insurance is highly helpful even if you already have a comprehensive health insurance plan. This is because it offers a lump-sum payout, which can be flexibly used for medical and non-medical purposes.