Insurance: How is insurance done for a serious illness like cancer? This is how critical illness insurance will be useful...

If you've ever wondered what would happen if you were to suffer a serious illness like cancer, you're not alone. Medical treatment has become so expensive these days that not only hospital expenses but also everyday life have become difficult. In such a situation, critical illness insurance can prove to be very useful. Let's understand it in simple terms.

What is critical illness insurance?
It is a special type of insurance designed for serious illnesses like cancer, heart attack, kidney failure, and paralysis. If an insured is diagnosed with one of these illnesses, the insurance company provides a lump sum payment—the entire amount at once. The best part is that this amount can be used not only for treatment but also for household expenses, children's education, EMIs, or loan repayments.

How does this insurance work?
Suppose a person is diagnosed with cancer. If this illness is covered under the insurance policy, the insurance company does not ask for medical bills. A diagnosis report is sufficient. The company then disburses the fixed amount directly to the policyholder.

However, there is a survival period. This means that the insured must survive for at least 14 to 30 days after the diagnosis of the illness before receiving the insurance payment.

Features of a Critical Illness Policy
1. Lump-sum payment: The insurance company disburses a fixed amount regardless of the cost of the treatment.

2. Shorter waiting period: The waiting period is shorter than with regular health insurance.

3. Tax benefits: Premiums paid on this policy are tax-deductible under Section 80D of the Income Tax Act.

4. Easy claim process: Only the illness report is required; medical bills are not required.

Exclusions:
If the illness is diagnosed during the waiting period, the claim is not available.

Pre-existing diseases are not covered.

If the person dies within the survival period, the payment is not made.

Losses incurred in situations such as self-harm, drug abuse, war, terrorism, or adventure sports are not covered.

Cosmetic surgery, dental treatment, or treatment abroad are also generally not covered.

Who should consider this insurance?
This insurance should be considered by those with a family history of cancer or kidney disease, those over 40, those in stressful jobs, or those who are the sole breadwinners. In such situations, household expenses must be met alongside medical expenses—and this is where this insurance helps.

Difference between Health Insurance and Critical Illness Insurance
Basic Health Insurance Critical Illness Insurance
Coverage: All types of illnesses, accidents, etc. Only critical illnesses (such as cancer, stroke, etc.)
Payment method: Based on actual expenses (reimbursement), Fixed amount (lump sum)
No survival period: Required for 14–30 days
Usage: Only medical expenses, Treatment + household expenses, loans, children's fees, etc.

If someone suddenly suffers from a disease like cancer, the treatment can cost lakhs of rupees. In such a situation, critical illness insurance becomes your financial shield.
It not only helps with hospital expenses, but also ensures that your household, children's education, and EMIs all continue to function smoothly during the illness.

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