Health Insurance Plans

pays for your hospital bills for diagnostics, surgery etc.

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Is your Medical Policy Enough?

| | Health Insurance

Sometimes your medical Policy falls too short when you contract a dreadful disease the treatment costs of which can literally squeeze your pockets. Critical Illness insurance which is also called dread disease policy is a contract wherein the Insurer agrees to pay a lump sum amount in the case when the Policyholder is contracted with a disease mentioned in a predetermined list of diseases termed as critical or dread diseases. The treatments of these diseases are quite expensive and a regular health insurance policy might not be sufficient to pay for them. Also comprehensive health insurance policies have some limitations upto which they would pay for room rent of the hospital and medical costs etc.

In most cases a person suffering from a critical illness is not able to work and thus some companies provide a waiver of Premium option along with critical illness rider so that the patient doesn’t have to bother about the payment of future premiums and the policy continues. The finances received under this policy can be used to pay for the costs of treatment, replace the loss in income due to inability to work, pay for the convalescence costs or fund the new lifestyle changes. Thus, we see that the policy may also be structured to pay out regular income and the disbursement may also be on the policyholder undergoing a surgical procedure, for example, having a heart bypass operation.

The insurer may provide financial protection to the policyholder by paying the mortgages in case of contracting a critical disease by the policyholder or corresponding death. The product design of this type provides some insurers to repay a segment or part of the outstanding mortgage debt on the contracting of a critical illness, whilst the full outstanding mortgage debt would be repaid on the passing away of the policyholder. Alternatively, the full sum Assured may be paid on the diagnosis of dread disease, but then no further payment is made on passing away, in effect making the dread disease payment an 'accelerated death payment'. In case of typical critical illness or dread disease insurance policies the insurer makes the payment to the policyholder when intimated that the policyholder has contracted the specified critical disease. However, some alternative types of this policy also exist wherein the insurer directly pays to the hospital or medical facility to cover the towering medical costs involved. The maximum limit up to which the insurance company shall pay per installment of treatment is predefined in the insurance contract. The idea behind these critical illness insurance products to pay hospitals directly is to avoid policyholder’s incurring out of pocket expenses as the reimbursement processes are lengthy. This gives more freedom to the policyholder to decide where they will receive treatment among a pre-selected group of hospitals. Sometimes a patient considers treatment for a disease like cancer in a foreign country in the hope of receiving better treatment; thankfully some critical illness insurance plans also offer policyholders the option to travel to highly specialized hospitals in other countries to receive treatment. These policies usually include travel and accommodation expenses for the policyholder and an attendant, as well as other services such as translators or personal nurses.

Following diseases generally fall into the category of critical diseases. However the insurance company may select a few from the list below to be covered as critical illnesses.

  • Cancer
  • Stroke
  • Heart Attack
  • Coronary Artery Bypass Surgery
  • Kidney Failure
  • Major Organ Transplant
  • Multiple Sclerosis
  • Deafness
  • Muteness (loss of speech)
  • Major Burns
  • Brain Tumor
  • HIV
  • Motor Neuron Disease
  • Alzheimer’s Disease
  • Parkinson’s Disease
  • Cystic Fibrosis
  • Heart Valve Replacement
  • Coma
  • Paralysis
  • Dismemberment
  • Loss of Independent Existence
  • Aortic surgery
  • Blindness

Generally, critical illness comes as a rider or additional benefit to life insurance. This rider is generally targeted towards the niche market as premium is towards the higher side. With its advent it has created more competition in the Health Insurance sector as it brings wider alternatives for people. The treatment of the above mentioned diseases is generally very expensive and the comprehensive health insurance policies generally do not have that steep limit. In order to avoid big potholes in one’s pockets one may go for critical disease insurance cover. It is highly recommended by experts. Being financially well equipped is half the battle won.