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Meaning List of Diseases Covered Why it is Important? How it Works? Who Should Buy? List of Critical Illness Cover Offered by Digit How to Buy? Benefits Critical Illness Insurance vs Health Insurance Mistakes to Avoid FAQ

What is Critical Illness Insurance?

Critical Illness Insurance is a type of health insurance benefit that provides a lump-sum payout if the insured person is diagnosed with a specified serious illness. This critical illness can refer to life-threatening and severe health conditions, requiring extensive medical attention such as liver failure, cancer, brain surgery, organ transplant, and many more.

However, critical illness covers are generally subject to a survival period (14 - 90 days). A survival period refers to the minimum number of days the insured person must survive after being diagnosed with a covered critical illness for the claim benefit to become payable.

Unlike a health insurance plan, which reimburses or directly pays hospitalisation expenses, a critical illness cover pays a fixed amount upon diagnosis of a covered condition. For example, if your policy has a sum insured of ₹25 lakh, you will receive the full ₹25 lakh as a lump-sum payout once you complete the survival period.

What Diseases are Covered Under Critical Illness Cover?

The list of diseases covered under a Critical Illness Cover varies from one insurer and policy to another.

Myocardial infarction or heart attack	Aorta surgery
End-stage liver failure	Open Chest CABG or Bypass surgery
Apallic Syndrome or persistent vegetative state	Benign Brain Tumours
End-stage lung failure	Alzheimer’s disease
Motor neurone disease	Cancer beyond a certain stage
Poliomyelitis	Permanent limb paralysis
Loss of limb	Severe head trauma
Coma beyond a certain severity	Muscular dystrophy
Stroke causing permanent disability	Medullary Cystic disease
Aplastic Anaemia	Major or third-degree burns
Angioplasty	Parkinson’s disease
Cardiomyopathy or heart muscle disease	Blindness
Chronic lung disease	Bone marrow transplant
Persisting symptoms related to multiple sclerosis	Heart valve surgery
Kidney failure	Organ transplant
Brain surgery	Loss of independent existence
Deafness	Loss of speech

Note: The exact list of covered illnesses, definitions, waiting periods, survival periods, and payout conditions can differ across policies. Therefore, it is important to review policy wording carefully to understand which critical illnesses are covered.

Why is Critical Illness Insurance Important?

Critical illness insurance is important because it provides a lump-sum payout after the diagnosis of a covered serious illness, helping individuals manage treatment costs, recovery expenses, income loss, and other financial obligations during a difficult period.

Hidden Treatment Costs

The financial impact of a critical illness often extends beyond hospital bills. Patients may incur additional expenses for medicines, diagnostic tests, travel for treatment, home nursing, rehabilitation, etc. For example, the total average out-of-pocket expenditure for cancer treatment in India ranges between ₹2,00,000 to ₹25,00,000 (1). Hence, the lump sum benefit from critical illness cover can be used for these expenses.

How Does Critical Illness Cover Work in Health Insurance?

Critical Illness Plans are designed to provide a lump-sum payout if you are diagnosed with a critical illness covered under the policy. Unlike regular health insurance, which reimburses eligible medical expenses, the payout from a critical illness plan is made directly to the policyholder and can be used for any financial need.

Here's how a Critical Illness Plan typically works:

Choose a Coverage Amount: When purchasing the policy, you select a sum insured based on your financial needs and existing insurance coverage.
Pay Regular Premiums: To keep the policy active, you pay premiums as per the chosen plan terms.
Get Diagnosed with a Covered Illness: If you are diagnosed with a critical illness listed in the policy, such as cancer, heart attack, stroke, or kidney failure, you can initiate a claim.

Submit the Required Documents: You will need to provide medical records, diagnostic reports, and other documents required by the insurer to assess the claim.
Receive the Lump-Sum Benefit: Once the claim is approved and the policy conditions are met, the insurer pays the insured amount as a lump sum.

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Who Should Buy Critical Illness Insurance?

Critical illness insurance can be useful for anyone who wants additional financial protection against the impact of serious medical conditions. It is particularly beneficial for:

Our Expert Explains How Much Critical Illness Insurance You Really Need

There is no one-size-fits-all answer when deciding the right amount of critical illness cover. From a financial planning perspective, the ideal cover should not only account for treatment-related expenses but also the potential loss of income, ongoing recovery costs, and existing financial commitments.

As a general rule, your critical illness cover should be sufficient to:

- Replace your income for at least 2 - 5 years, especially if you are the primary breadwinner.

- Cover ongoing expenses such as home loan EMIs, rent, and children's education costs (if any).

- Manage expenses that may not be covered by regular health insurance.

- Protect your long-term savings and investments from being depleted during a medical crisis.

So, when you are choosing a critical illness cover, don't focus only on hospital bills. Think about the broader financial impact of a serious illness, including income loss, ongoing expenses, and family responsibilities.

What are the Different Critical Illness Cover Options Offered by Digit?

Digit offers two types of critical illness covers under the Digit Health Care Plus Policy. It can either be purchased as a standalone policy or opted for an add-on in health insurance policy.

Critical Illness Benefit Cover

Critical Illness Hospitalisation Cover

This cover pays a fixed lump sum amount if you are diagnosed with a covered critical illness, such as cancer, stroke, kidney failure, or another illness specified in your policy.

The payout is made regardless of the actual treatment cost, provided that all policy conditions are met.

Example: Suppose you have a Critical Illness Benefit Cover of ₹10 lakh and are diagnosed with a covered illness. Once your claim is approved, you receive the entire ₹10 lakh as a lump sum. Even if your hospital bill is only ₹4 lakh, you still receive the full ₹10 lakh and can use the remaining amount for other financial needs.

This cover helps pay for hospitalisation expenses incurred due to a covered critical illness.

Instead of receiving a lump sum amount, you are covered for eligible medical expenses such as room rent, doctor fees, surgeries, and other hospitalisation-related costs, up to the sum insured mentioned in your policy.

Example: Suppose you have a Critical Illness Hospitalisation Cover with a sum insured of ₹10 lakh. If you are hospitalised for the treatment of a covered critical illness and your admissible medical expenses amount to ₹3 lakh, the policy can cover those expenses as per the policy terms and conditions.

How to Buy Critical Illness Cover in Health Insurance at Digit?

Buying critical illness cover at Digit is simple and hassle-free. All health insurance plans at Digit provide coverage for critical illness. To buy a Digit health insurance plan with critical illness cover, follow these simple steps:

Enter Basic Details

Visit the Digit app or website. Enter your PIN code and mobile number, select your preferred health insurance plan and provide age details, family members covered, etc.

Choose Plan & Add Member Details

Compare & select the plan, sum insured, add-on covers and apply any available discounts to get the final premium amount. Further, provide the member details for everyone you’re covering.

Make Payment & Submit KYC

Once done, proceed to make the premium payment and submit your KYC documents to complete the purchase process.

Final Review & Processing

Now, your application is undergoing a brief review process. Digit may request a health declaration, lifestyle information, or medical details & reports if required. Now, based on your medical underwriting, your policy will be issued and sent to your email. You can also access it anytime through the Digit app.

What are the Benefits of Critical Illness Insurance?

Critical illness insurance provides financial support when you are diagnosed with a covered serious medical condition. Here are the benefits of getting a critical illness insurance:

What is the Difference Between Critical Illness Insurance vs Health Insurance?

While both health insurance and critical illness insurance help manage medical emergencies, they serve different purposes. Health Insurance primarily covers hospitalisation expenses, whereas Critical Illness Insurance provides a lump-sum payout upon the diagnosis of a covered critical illness.

Here are the main differences between critical illness insurance and health insurance policy:

Basis of Comparison	Health Insurance	Critical Illness Insurance
Purpose	Health insurance covers eligible medical expenses incurred during hospitalisation.	Critical illness provides a lump sum payout upon diagnosis of a covered critical illness.
Type of Claims	Reimbursement or cashless settlement of medical bills.	Fixed lump sum amount paid directly to the policyholder.
When Can You Claim?	When hospitalisation or eligible medical treatment takes place.	When a covered critical illness is diagnosed and policy conditions are met.
Coverage	Covers a wide range of illnesses, injuries, surgeries, and hospitalisation expenses.	Covers specific serious illnesses listed in the policy, such as cancer, stroke, or kidney failure.
Claim Eligibility Timeline	The coverage may be subject to waiting period in health insurance, which has initial, pre-existing disease, and specific disease waiting periods*.	Critical illness policies typically have a waiting period after policy purchase and may also have a survival period (14 - 90 days) after diagnosis before the benefit is paid*.
Use of Claim Amount	Health Insurance sum insured can only be used towards eligible medical expenses.	The amount can be used for any purpose, including treatment, loan repayments, or household expenses.
Financial Role	Protects against rising healthcare costs.	Protects against the overall financial impact of a serious illness.

*Note: The survival period and waiting period can differ from policy to policy. Read your policy document thoroughly to know about all the clauses.

What are the Common Mistakes to Avoid When Buying Critical Illness Cover?

Choosing a critical illness cover requires more than just comparing premiums. Understanding the policy terms and coverage details can help ensure that the cover provides adequate financial protection when it is needed most. Here are some common mistakes to avoid:

Choosing a Low Sum Insured: Many people select a lower coverage amount to reduce premiums. However, the financial impact of a critical illness can extend beyond hospital bills and may include rehabilitation costs, loss of income, and ongoing medical expenses. Choosing an adequate sum insured can help provide better financial support during recovery.
Not Checking the List of Covered Illnesses: Not all critical illness policies cover the same medical conditions. Before purchasing a plan, review the list of covered illnesses and their definitions to ensure the policy aligns with your needs and health concerns.
Overlooking Waiting and Survival Periods: Critical illness policies usually have a waiting period before coverage becomes active. Some plans may also require the insured to survive for a specified period after diagnosis before the benefit is payable.
Focusing Only on Premium Costs: Selecting a policy solely because it has the lowest premium may result in limited coverage or lower benefits. It is important to evaluate the coverage offered, policy terms, exclusions, and payout amount in addition to the premium.
Ignoring Policy Exclusions: Every critical illness policy has exclusions and conditions under which claims may not be payable. Reading the policy document carefully can help you understand the scope of coverage before making a purchase decision.

While health insurance helps cover eligible medical expenses, a critical illness insurance cover provides an additional layer of protection by offering a lump-sum payout upon the diagnosis of a covered critical illness.

By combining health insurance with critical illness cover, you can prepare not only for medical emergencies but also for the broader financial impact that serious illnesses may have on your life.

Before choosing a policy, make sure you understand the covered illnesses, sum insured, waiting period, survival period, and policy terms. The right critical illness cover can help you face unexpected health challenges with greater financial confidence and peace of mind.

FAQs about Critical Illness Insurance

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Are critical illness policies standalone insurance plans?

Yes, critical illness insurance can be purchased as a standalone policy. In some cases, it is also available as an add-on rider that can be attached to a health insurance policy. The right option depends on your existing coverage and financial protection needs.

Is Critical Illness Cover Included in Health Insurance?

Critical illness cover may or may not be included in a health insurance policy, depending on the insurer and the plan chosen. Some insurers offer it as an optional add-on rider, while others include it as part of their health insurance plans.

What is a Survival Period in Critical Illness Insurance?

A survival period is the minimum number of days the insured person must survive after being diagnosed with a covered critical illness for the claim of benefit to become payable. For example, if a policy has a 30-day survival period, the insured must survive for at least 30 days after diagnosis to receive the payout.

Can I Use the Critical Illness Payout for Non-Medical Expenses?

Yes, you can use the critical illness payout or non-medical expenses such as household bills, loan repayments, children's education, rehabilitation costs, home care, travel for treatment, or to compensate for a temporary loss of income during recovery.

Is the list of critical illnesses covered the same for every insurance provider in India?

No, the list of critical illnesses included in the cover varies from one insurance company to the other.

What Happens if I Recover from a Critical Illness?

Recovering from a critical illness does not affect a claim that has already been approved and paid according to the policy terms.

When Can I Claim Critical Illness Insurance?

You can claim critical illness insurance when you are diagnosed with a critical illness covered under your policy and meet the applicable policy conditions such as waiting period and survival period, if applicable. Once the claim is approved, the insurer pays the agreed lump-sum benefit.

Can I Claim Critical Illness Insurance More Than Once?

This depends on the policy terms and conditions. In many critical illness insurance plans, the lump-sum benefit is paid once upon the diagnosis of a covered illness. However, some policies may offer coverage for multiple critical illnesses subject to specified conditions.

How much tax can I save on the premiums payable for critical illness plans?

If you pay premiums for critical illness, you are liable for the same income tax deductions as in the event of standard medical insurance plans under Section 80D of the Income Tax Act.

Up to ₹25,000 per year if you are aged below 60 years.
Up to ₹50,000 per year if you are 60 years or older.