How is critical illness health insurance beneficial for your future?
In general, buying a critical health insurance policy is useful for everyone since a severe medical condition can occur at any time. However, with the rising incidence of lifestyle-related diseases among today's youth, buying a critical health policy is becoming more important.
The advantages of buying critical illness health insurance early in your life are as follows:
• Coverage for medical bills
Insurance providers disburse the entire sum insured of a critical illness insurance policy as a lump sum amount upon diagnosis of severe disease. Therefore, you can directly avail of medical treatment without waiting for funds. This is unlike standard health insurance policies, where the sum insured is disbursed according to the expense documents.
• Non-medical expenses cover
You can use the sum insured amount to fund more than just your medical expenses. These can include household expenses, children's education fees, transportation costs, etc. This feature provides financial protection to you and your family during a medical emergency.
• Income replacement
If diagnosed with a critical illness, you may be forced to take extended leave from work due to your health condition. This will have a noticeable impact on your income. A critical illness insurance policy can cover the loss of income and provide financial protection during this income loss.
• Attractive premiums
The premiums payable when buying a critical illness cover depend on the age and health of the applicant. The younger you are, the healthier and less likely to suffer from a critical disease you are perceived to be. Therefore, insurance providers will charge lower premiums on your critical illness insurance policy than older applicants. This is another reason that you should buy such a policy as early as possible.
• Tax benefits
Critical illness insurance policies are also subject to tax benefits under the Income Tax Act, 1961. According to Section 80D of the Income Tax Act, 1961, premiums paid towards critical illness insurance in India are subject to tax deductions up to Rs. 25,000 for beneficiaries who are not. For senior citizens, tax deductions of up to Rs. 50,000 are applicable.
• Alternatives to critical illness insurance
The rising healthcare costs in India have made access to quality healthcare significantly expensive. Having a health insurance policy like those extended by Bajaj Finance has thus become an absolute necessity. However, standard healthcare policies do not cover acute life-threatening diseases. Therefore, there are no real alternatives to critical illness insurance policies.
You can fund your treatment from your savings account or other investment instruments. However, you will still incur significant expenses and make it financially difficult for yourself and your loved ones.
Pros of critical illness insurance
- You can utilise the sum insured amount to cover expenses beyond medical costs.
- Critical illness insurance protects your loved ones during financial stress.
- Tax deductions are applicable on insurance premiums.
Cons of critical illness insurance
- Coverage for some conditions like cancer depends on the severity, so some types and stages of cancer may not be covered.
- Critical illness policy may not cover the recurrence of conditions like a heart attack.
- Coverage depends on age.
- There may be no coverage for certain chronic diseases.
Critical illness insurance policies are thus very essential to provide financial protection against medical emergencies caused by severe or life-threatening conditions. In addition, the earlier you buy a critical illness policy, the more secure you and your loved ones will be.
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