What Is Critical Illness Cover?

“Critical Illness” means any illness, disease, or health condition that are life-threatening and require comprehensive care and continuous monitoring, often in intensive care. Health issues such as Cancer, Kidney failures, Stroke, Heart Attacks (Myocardial Infarction), Multiple Sclerosis, and Paralysis come under Critical Illnesses.

According to the World Health Organization (WHO), cardiovascular diseases, cancer, stroke, chronic obstructive pulmonary disease are some of the significant health ailments in India. One of the reasons why these conditions are categorised under critical illness is that these diseases affect vital body parts such as the heart, lungs, liver, skeleton, and brain.

That being said, early diagnosis of these diseases in most case is not possible due to a variety of reasons such as negligence and lack of pre-emptive health check-ups. As a result, the disease continues to affect an individual for days, months, and years before the diagnosis becomes possible, and treatment is started.

How Prone Are You To Any Critical Illness?

In India, the number of new cases of cancer and other critical illnesses is steadily increasing. In 2018, the Indian Council of Medical Research’s National Institute of Cancer Prevention and Research (ICMR-NICPR) released the India-specific data** from Globocan (Global Cancer Observatory).

It was reported that the number of cancer cases in the country has gone up by 15.7 percent since 2012, with a total of 11.57 lakh cancer cases reported in the year.

Globocan reported that there had been a 12.2 percent increase in the total number of cancer-related deaths since 2012, with approximately 7,84,821 people dying from the health condition in 2018.

Moreover, data presented by the Registrar General of India*, WHO (World Health Organisation) and Global Burden of Disease (GBD) shows that cardiovascular diseases (also known as CVD or heart-related health problems) are one of the leading causes of death and disability in the country.

Between 2007 and 2017, while the increase in deaths (across all ages) due to CVD had been 49.8 percent, the increase in mortality rate due to Chronic obstructive pulmonary disease (or COPD), stroke and diabetes have been 39.4 percent, 37.1 percent, and 53.8 percent respectively.

According to the Indian Heart Association^, almost 50% of all heart attacks in Indian men occur below 50 years of age while men under the age of 40 report 25% of all cases of heart attacks. Also, the male population in the country, between the age group of 30 to 74 is at a higher risk of cardiovascular diseases than the female population. While Indian women had a 12.7 percent risk of developing cardiovascular issues, approximately 21.4 percent of the males were at risk.

Overall, the working population in India, between the ages of 30 to 74 are more prone to developing cardiovascular diseases and cancer. The other ailments such as kidney failure, sclerosis, stroke or paralysis, too present a palpable risk to the population in India.

What is the cost of treatment of critical illnesses?

Various critical illnesses require different treatment methodologies, depending on an individual’s diagnosis. Typically, critical illness treatments are divided into three distinct stages – pre-operation, during hospitalization and post hospitalization.

Given the fact that these illnesses require extensive medical care and hospitalization, the overall treatment costs of any critical illness can quickly skyrocket. The below table depicts the expected cost of treatment of some of the prominent health conditions in India – 

*Note – the cost of treatments depicted above may vary depending upon individual cases. Also, the list of health conditions is not exhaustive. Therefore, consult your physician about the actual cost of treatment. (source: http://www.indiahealthcaretourism.com/average_cost_of_treatment.php)

In addition to the cost of medical care and hospitalization, you must also incur additional expenses in the form of travel and lifestyle expenses, while dealing with the loss of income. Overall, the treatment costs of critical illnesses can quickly escalate and put a severe dent in your savings. Therefore, you need to prepare your finances well in advance to avoid any unexpected medical expenses. This is where a critical illness cover comes into the picture.

What does Critical Illness benefit Cover?

Critical Illness Insurance, also known as severe illness insurance or trauma insurance, is a form of health insurance that generally covers you against diseases such as cancer, heart attacks, or stroke. Depending on your critical insurance policy, you can be covered against other types of illnesses such as multiple sclerosis or kidney failures.

Unlike health insurance, critical illness insurance cover doesn’t provide financial assistance to cover your medical bills only. Instead, it helps pay for all the other expenses you may incur while you are receiving medical care and not working.

Most critical illness insurance plans provide for the payment of a lump sum benefit, in case you (the policyholder) are diagnosed as suffering from any one of the terminal illnesses, specified in the policy document.

The payment of a lump sum during such illnesses rather than on death, can provide a considerable improvement in your lifestyle and help alleviate the consequences of infirmity.  

Why should you buy critical illness insurance even if you have a health insurance cover?

A health insurance policy works differently than a term plan with critical illness cover. Given the fact that a comprehensive health insurance plan generally offers to pay the hospitalization bills, you might debate that there is no need for any additional coverage.

However, any critical illness calls for specialized care and treatment, and since health insurance plan has limitations on medicinal costs and hospitalization expenses, the chances are that the plan will not cover the treatment expenses entirely.

In other words, there is a limit on certain expenses covered by the health plan such as intensive care, prosthetic and medication, which in turn, may hamper your ability to handle the steadily rising treatment costs. Thus, you may have no other option than to pay for any additional expenses from your pocket.

There are some health insurance plans, which offer coverage against critical illness (in the form of riders or add-ons). However, a standalone term plan with critical illness cover is far more comprehensive, both in terms of several diseases covered and the amount of offered coverage. You receive a significantly large amount of money as a lump sum, immediately upon diagnosis of a critical illness. Along with this, the term insurance plan continues to provide life cover to your family, so that they have a secure financial net to help them in case of an eventuality.

Why Your Corporate Health Plan May Not Be Enough?

The most important reason why corporate health plans are not enough to protect you against a critical illness is that, with a few exceptions, most individuals do not spend their entire lives working with the same employer.

Also, chances are you may change jobs, only to find that your new employer does not offer a health plan, or you may start your own business, which would mean that there would be no employer benefits for you. In any such case, you will not be entitled to any corporate insurance coverage.

If you think about what could happen in the period between jobs, you are quite mistaken. For once, a medical emergency can occur at any time, and in case you do not have an insurance cover, you would have to pay for the treatment costs from your pocket.

Moreover, corporate health plans usually have a restrictive fine print, which means that they may skimp on expenses such as a number of dependents under the plan, hospitalization limits, diagnostic tests, post-operative care, and ambulance charges. Eventually, you may have to pay for treatment costs once you have crossed a certain threshold.

To avoid this, you must secure yourself with a personal critical illness cover, which will help you with sudden medical expenses even if you are between jobs.

How is Critical Illness Cover different from Disability and Accidental Cover?

The disability and accidental cover and critical illness insurance cover two separate things. Accidental and disability cover offers to provide a lump sum while you are recovering from an injury sustained in an accident.

When you meet with an accident and suffer injuries or dismemberment, you are not able to return to your job immediately and make an earning. In this scenario, the additional financial assistance from the accidental and disability cover helps you recover without any stresses of not having a pay check.

On the other hand, a critical illness insurance policy will provide you with a lump sum of money to support your lifestyle with a life-threatening health condition or illness-related disability. Thus, you can opt for the best possible treatment for the illness without compromising your health or savings.

Overall, both these insurance covers offer comprehensive financial assistance to help you meet your household expenses along with therapy and medical care that is not covered under your health insurance plan.

What is Term Insurance with Critical Illness Cover?

Max Life Insurance offers Critical Illness benefit as an add-on with its term plan variants – Online Term Plan Plus and Smart Term Plan. The Smart Term Plan provides financial security to your family in case of your unexpected demise during the term plan tenure.

On the other hand, the Critical Illness benefit will provide you financial security against 40 life-threatening health conditions such as kidney failures, cardiovascular diseases, and cancer etc. The CI benefit will provide a lump sum to you in case you are diagnosed with a critical illness. This way, you can take care of medical care and other miscellaneous expenses without damaging your savings.

How Does the Critical Illness Cover Work?

Akash, who is a healthy 30-year old working professional, decides to invest in Max Life Smart Term Plan for his family. He chooses a life cover of Rs. 50 lakhs for a policy term of 30 years, along with an additional Critical Illness coverage of Rs. 25 lakhs and opted for Future Premium Waiver in Case of Critical Illness or Disability.

Scenario 1: Scenario 1: Akash pays all his premiums and survives the policy term.

The Increasing Accelerated Critical Illness Benefit will continue to increase by 5% p.a. of the Sum Assured chosen at inception. The maximum increase in ACI Sum Assured allowed is:

• Rs. 50 lacs, or
• 50% of the base policy Sum Assured chosen at inception, or
• 200% of the ACI Sum Assured chosen at inception

Also you will receive the complete amount of annualized premium invested under the base policy (additional premium amounts charged for benefits such as critical illness cover, accident cover option or rider add-ons will not be paid back) upon maturity of the plan, after which both the term plan and the ACI benefit will terminate.  

Scenario 2: Akash is diagnosed with Stage-1 cancer after five years of buying the policy.

Upon diagnosis, Akash receives a partial lump sum payout of the CI benefit to help take care of the treatment expenses. The Death Benefit under the Term insurance plan will reduce proportionately, by the amount equal to the CI benefit paid out to Akash

Moreover, both the critical illness and the term life cover continue to protect Akash. Also, he will not have to pay any future premiums as he had opted for the premium waiver rider (In case he had not purchased the waiver of premium rider, he would have had to continue paying the future premiums as per the CI benefit plan renewal.)

Scenario 3: Akash develops renal complications due to his cancer treatment after undergoing cancer treatment for 2 years

In this case, he will receive the remaining amount of the ACI Sum Assured benefit upon diagnosis of the renal failure, after which the ACI benefit will terminate. However, the term plan cover will continue to provide financial security to Akash’s family, in case of his unexpected demise.

Is There A Waiver Of Premium In Term Insurance With Critical Illness?

Paying the premium on time is essential to continue protection of your critical illness insurance policy. In case you miss out on the payment of premiums, you can risk forfeiting the plan. While you may not skip paying the premiums willingly, you may be unable to make timely payments in certain situations.

For example, if you suffer a loss of income due to a Critical Illness, accidental dismemberment, or death, you could miss paying the premium and lose out on the insurance coverage. To avoid any such instances; therefore, you can opt for the Waiver of Premium Plus Rider (UIN 104B029V03) along with the Critical Illness insurance cover.

Under the Waiver of Premium Plus Rider, all future premium payments will be waived off by the insurance company. Thus, even if you are unable to continue paying the premiums, your critical illness plan continues to act as your safety net.

Who can all buy critical illness cover?

The minimum entry age to purchase the critical illness cover is 18 years, while the maximum age of purchasing the CI benefit cover is 65 years. While both male and female buyers can opt for the CI benefit at the same premium rates, female buyers have an additional offset on the rate of premium and a high cancer care cover.

What are the conditions covered in critical Illness?

The Accelerated Critical Illness Benefit from Max Life Smart Term Plan covers the following 40 health conditions:

• Cancer of Specified Severity (malignant tumour)
• Angioplasty
• First Heart Attack – of Specified Severity
• Open Heart Replacement or Repair of Heart Valves
• Surgery to Aorta
• Cardiomyopathy
• Primary Pulmonary Hypertension
• Open Chest CABG
• Blindness
• Chronic Liver disease
• Chronic Lung Disease
• Kidney Failure requiring regular dialysis
• Major Organ or Bone Marrow Transplant (as the recipient)
• Apallic Syndrome
• Benign Brain Tumour
• Brain Surgery
• Coma of specified Severity
• Major Head Trauma
• Permanent Paralysis of Limbs
• Stroke resulting in permanent symptoms
• Alzheimer's Disease
• Motor Neurone Disease with Permanent Symptoms
• Multiple Sclerosis with Persisting Symptoms
• Muscular Dystrophy
• Parkinson’s Disease
• Loss of Independent Existence
• Loss of Limbs
• Deafness
• Loss of Speech
• Medullary Cystic Disease
• Systemic Lupus Erythematosus
• Major Burns
• Aplastic Anaemia
• Poliomyelitis
• Bacterial Meningitis
• Encephalitis
• Progressive supranuclear palsy
• Severe Rheumatoid arthritis
• Creutzfeldt - Jakob disease
• Fulminant Viral Hepatitis

What is the waiting period in the Critical Illness plan?

The waiting period of 90 days is applicable in case of the Critical Illness Benefit. The waiting period is defined as the period starting from the date of policy issuance or the date of reinstatement, during which you receive no benefits under the Critical Illness Benefit.

In case you are diagnosed with a Critical Illness condition, you cannot avail the benefit from the plan. Also, the critical illness benefit will terminate, and Max Life will refund the premium paid corresponding to the CI benefit.

While the waiting period applies to the new policy buyers, it does not apply to the existing members of a renewing group who have already completed their waiting period.

How Is the risk assessed when you buy Critical Illness?

Life insurance companies determine how much your critical illness cover will cost based on individual risk factors. Thus, the more risk factors you have, the more is the premium payable for the critical illness policy.

The life insurance companies have a specific range of mortality expectations, in which an individual will be considered an average risk; and therefore, will purchase critical illness cover for a standard premium rate. In other words, an insurance company determines the risk class of an applicant by evaluating factors that may impact his or her longevity.

Other individuals who have fewer risks than the average will then pay the preferred rates (lesser premium rates than average) for the life insurance benefits, while those who have more risks than the average will pay more premium than the average rate.

Risk assessment under critical illness insurance is based on various key areas of focus and unique considerations, such as:

· Identification of applicants whose family history, occupation or medical history may predispose them to develop any one of the critical illnesses covered under the plan

· The relation between the medical and non-medical history of an individual to the covered conditions

Is Critical Illness Cover costly?

When you purchase a term plan with critical illness benefit, you can opt for a CI cover that is up to 50% of the Sum Assured under the term plan. It is true that you pay an additional premium to add the Critical Illness benefit.

However, when you consider the expected cost of treatment of prominent critical illnesses in India (se table above) and the fact that the CI benefit provides you a significantly large amount of money as a lump sum, immediately upon diagnosis, Critical Illness benefit surely becomes an affordable proposition.

Consider a scenario^^:

If a 30-year-old male decides to purchase Max Life Smart Term for a life cover of Rs. 50 lakhs for a policy term of 30 years, he can purchase Critical Illness coverage of Rs. 25 lakhs by paying an additional premium of Rs. 7,523 annually, on top of the annual premium payable under the term plan. However, the premium paid towards the critical illness cover is exempted from taxation under Section 80D.  ;

Tax Benefits in Critical Illness Cover

The premium paid towards critical illness benefit qualifies for deduction under Section 80D of the Income Tax Act 1961. The below table depicts the tax benefits you can avail on the premium paid towards the critical illness benefit

How to Buy Critical Illness Cover?

Buying critical illness benefit from Max Life is quick and hassle-free. You can purchase the CI benefit with either the Online Term Plan Plus or the Smart Term Plan. Here are a few hallmarks of our life insurance plans:

• Multiple channels for a seamless buying experience
• One of the fastest policy issuance TATs (Turn Around Time) in the insurance sector
• No bulky paperwork while buying or paying a premium for policies
• Dedicated claim settlement officer to make the claim process effortless
• Multiple premium payment channels, including net banking, digital wallet, credit cards, and debit cards

Here is the breakdown of our buying process: 

Step 1: Select your policy term, and the sum assured

The first step is to use the online life insurance calculator to calculate the premium for the desired sum assured and tenure of the term plan.

Note: The ideal benefit amount for your life insurance plan should be 10 to 15 times your annual take-away income.

Step 2: Choose Riders

The next step will be to choose add-on benefits, in the form of riders over and above the base cover. These additional benefits enhance your financial protection in case of unfortunate events such as a disability or being diagnosed with a life-threatening health condition. These optional benefits are available on payment of additional premium.

You can choose from the following rider options:

* Critical illness cover that offers to cover up to 40 illnesses

* Accidental death and disability benefit

* Premium waiver benefit, applicable in case of diagnosis of critical health condition or disability

Step 3: Payment of Premium

After selecting the plan and its benefits, you can proceed to complete filing of personal information and pay the premium. You will need to fill out the following information and make the payment:

* Income, education, and profession details

* Nominee details

* Present Address (where the medical test will be conducted)

You have the option to pay the premium online using net banking, debit or credit card

Step 4: Fill out the Proposal Form

Essentially, the proposal form is a detailed version of your application form, which focuses on the information related to your life such as your lifestyle habits (such as smoking and drinking) and medical history (including that of your parents)

Step 5: Medical Tests

In some cases, based on individual life-risk, a medical test may be proposed. Any such medical evaluation will be conducted after the successful completion of the proposal form and document submission.  

Live Life to the Max

In life, it is essential to work towards your dreams. At the same time, it is crucial that you plan for both the physical and financial well-being of your loved ones and yourself.  In today’s day and age, several health risks may not only endanger your health but can also put a severe dent to your savings.

Therefore, you need to prepare in advance against these uncertainties of life. Moreover, the best way to do that is to buy an online term plan that offers an additional option of Critical Illness Benefit. Having a term plan with Critical Illness benefit in your kitty, will not only enable you to opt for the adequate treatment possible in case you are diagnosed with a life-threatening illness but also help your family sustain their current lifestyle while working form their goals.

What are all documents required at the time of claim?

Upon request, you must submit the following documents for assessment to Max Life Insurance at the time of filing a critical illness claim:

• Duly filled and signed claim form;
• Medical Certificate that confirms that you have been diagnosed with a Critical Illness;
• Certificate from attending Medical Practitioner, which proves that your claim does not relate to any injury or pre-existing illness or any other illness (diagnosed within the first 90 days of purchasing the cover).
• Investigation test reports that confirm the diagnosis as stated under the definition of the respective Critical Illnesses;
• First consultation letter and prescriptions, if any;
• KYC documents;
• Specific documents detailed under the respective Critical Illness;
• Copy of latest statement to confirm the principal outstanding, in case you have opted for the reducing balance Sum Insured variant of the 

What Max Life Critical Illness Insurance Cover has to offer?

Max Life Insurance offers accelerated payouts under its Critical Insurance Plan. You may choose a Sum Assured under the Critical Illness (CI) benefit, starting with a minimum of Rs 5 Lakh (in intervals of Rs 5 Lakh) and up to 50% of the Sum Assured or Rs 50 Lakh, whichever is lower.

The CI benefit Sum Assured will be payable on the diagnosis of any of the Critical Illnesses specified under the policy underwriting, within the critical illness cover period, while the remaining Sum Assured will be payable as Death Benefit.

Here are some of the important aspects of Critical Illness Insurance:

• The maximum maturity age for ACI Benefit cover will be equal to 75 years (age last birthday), subject to maximum policy term of 50 years.
• In case you choose the Limited Pay option (Pay till 60), the CI Benefit Cover Period will be equal to the premium payment term.
• The CI Sum Assured is always paid as a lump sum benefit, irrespective of the Death Benefit variant selected by the policyholder.
• Once the payment of the entire CI Sum Assured is made, the Accelerated Critical Illness plan shall cease.
• There is a waiting period of 90 days for the Critical Illness benefit.

*For the complete list of features and exceptions, please refer to the Critical Illness Policy Annexure.