Importance of critical illness insurance cover

Most people tend to overlook it believing that since they have Mediclaim they are adequately covered.

Published: 05th April 2021 11:04 AM  |   Last Updated: 05th April 2021 11:04 AM   |  A+A-

health insurance

For representational purpose.

Express News Service

It is unfortunate and seemingly on account of all-round negligence that, within the short span of a month, the dreaded Covid-19 virus, which seemed to be on the decline across India has returned with a vengeance in the form of a second wave. Election rallies, mega celebrations for marriages, crowding at public places and a plethora of other reasons have been attributed for Covid-19’s resurgence and it’s already too late to cry over spilt milk.

The situation reminded me of the large number of people who had contacted me after I wrote a column in this publication in August 2020 when the first Covid wave was on the upswing. Hereunder are select re-grouped excerpts thereof :

‘Prior to the start of this financial year (i.e. 2020-21), barely ten per cent of those with the means, were interested in buying health insurance to cover new age diseases. But since the advent of the fear instilled by the pandemic, 71 per cent now considers health insurance a necessity. Notably, and almost overnight, 57 per cent of those surveyed now claim to understand the importance of comprehensive health insurance plans.’Returning back to the present, this brings me to a very crucial Insurance product, namely critical illness insurance.

Most people tend to overlook it believing that since they have Mediclaim they are adequately covered. But the fact is, firstly there has to be hospitalization for Mediclaim to kick in, and further, there are often caps and sub-limits that will easily be exceeded in the event of a critical illness. Furthermore, escalation in premium payable in case of mediclaim is a given, especially post a year like the last one where huge payouts have been made.

In contrast to this, there are Critical Illness insurance policies that offer the optional benefit of covering several ( approximately 30 usually ) critical illnesses such as cancer, heart attack and kidney failure for a maximum of 30 years without any change in premium. What also makes some of these product offerings distinctive is that it gives full claim payout on the first diagnosis of any of these covered critical illnesses, even without Hospital Bills. This payout amount is crucial as it can also safeguard one’s family against the loss of income arising out of the illness that could put one out of action for a prolonged period of time.

Some of the critical illness policies come bundled with an equivalent term plan and that usually adds an enhanced financial ring around the family of the one with a critical illness in the event of non-survival. That the payment of Premium paid under such a policy can be demarcated and qualifies for deductions under both, Section 80C as well as Section 80D of the Income Tax Act, offers an additional benefit. 

Finally, one must remember that if ever diagnosed with a critical illness, it can affect one physically, emotionally and financially. By investing in a critical illness cover, one can at least take the inevitable 
financial pain and insecurity out of the equation.

Ashok Kumar
Head of LKW-India. He can be reached at


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