The Indian health insurance industry has seen massive transformation in the last few years. Post the COVID-19 crises, policyholders have turned their attention to the importance of having an appropriate health insurance policy.
The health insurance market has been growing at a steady pace for the past few years, and it has been the main driver of the non-life insurance industry since March 2020. The retail health insurance market is expected to expand steadily as a result of rising customer awareness, a heightened apprehension of pandemics, and the ongoing introduction of new products by insurers to appeal to a wide variety of customers.
However, there are certain coverages in health insurance segments that still confuse policyholders. Take, for example, critical illness coverage. There are several myths in the minds of policyholders about how exactly it is different from health insurance coverage.
In this article, we demystify myths and facts about important points for critical illness coverage for policyholders.
Myth: Critical illness coverage is not needed for young individuals.
Fact: Like health insurance coverage, even critical illness coverage is not related to age, as some serious health ailments might occur even at a younger age. With changes in lifestyles and work cultures coupled with unhealthy eating habits, young individuals are becoming more susceptible to critical illness. So along with comprehensive health insurance coverage, one should have higher coverage even for critical illnesses.
Myth: We don’t need critical illness coverage as we have health insurance.
Fact:Policyholders should understand that health insurance coverage and critical illness coverage are two different products. A health insurance policy covers hospitalisation expenses when the policyholder falls ill and is admitted to the hospital for more than 24 hours. On the other side, a critical illness insurance policy offers a lump sum pay-out to the policyholder when they are diagnosed with critical ailments like heart attack, cancer, stroke, or paralysis, among others.
Myth: All critical illness coverage is covered in my policy.
Fact: Like every other insurance policy, policyholders should read the exclusions and inclusions of critical illness coverage before buying them. To give an example, not every form of cancer is covered in every critical illness policy. In some cases, insurers will only pay if the policyholder is diagnosed with stage 2–3 cancer. Partial liver damage may not qualify for insurance either.
Myth: All pre-existing illnesses are covered under critical illness coverage.
Fact: If the policyholders think that all the pre-existing diseases will be covered in the critical illness coverage, they are thinking wrong. Some life insurance players who provide critical illness riders exclude all pre-existing conditions. However, some players still provide coverage even if the policyholder has a pre-existing medical condition.
During the pre-medical testing, if the policyholder is diagnosed with a critical illness, they might have to pay a high premium. Some plans also have a waiting period as well as a surviving period clause in their policy. Therefore, the policyholder should purchase the critical illness plan while they are healthy and then benefit from the lump sum pay-out upon diagnosis.
Myth: Critical illness plans are cheaper than health insurance plans.
Fact: Someone might assume that critical illness coverage is cheaper, so one should only buy it. Yes, they are sometimes cheaper than health insurance because the risk of a claim being made on the critical illness plan is lower than the risk of a claim on the health insurance plan.
It is advisable to spend some time comparing plans and select the one that suits the policyholder in the best possible way. In cases where the policyholder wants a policy that covers the later stages of the illness, they might have to pay higher premiums. If you think that critical illness plans are costly, you can also buy critical illness add-on coverage with your health insurance or life insurance.
Rakesh Goyal is the Director of Probus Insurance, an InsurTech broking company selling both life and non-life insurance policies.