A typical health policy from a general insurer is based on the principle of indemnity. In other words, it undertakes to reimburse the costs incurred by the policyholder due to hospitalisation. Some also offer specialised policies, or critical illness covers, that are designed to provide the insured with a lump-sum amount upon diagnosis of certain serious ailments. These are essentially benefit policies, where the amount handed out is not linked to the actual expenses incurred for treatment, nor does it insist on the policyholder being hospitalised to be eligible for the claim. Both general and life insurers (which typically offer benefit-based basic health covers) sell such products in the market. Recently, Bharti-AXA General Insurance has launched its Smarthealth Critical Illness Insurance Policy which promises to cover 20 critical illnesses listed in the policy brochure. The product allows you to decide whether you would like the hospitalisation expenses to be reimbursed or obtain a lump sum upon diagnosis. If you choose the former option, subject to sub-limits, the policy also undertakes to reimburse ambulance charges, cost of nursing at home, expenses of those accompanying the patient, children's education fund and so on. In case of the latter, the entire sum assured is paid out once the claim is approved.
The sum assured under this policy ranges from . 2 lakh to . 5 lakh. For this cover range, the annual premium for an individual in the agegroup of 26-35 years could cost anywhere between . 658–1,644. The maximum age for renewal under the policy is 65 years.
Critical illness covers are usually recommended by financial advisors to supplement your basic health cover. The idea behind this stance is that while the basic policy takes care of your expenses, covers like these can circumvent financial crisis caused by break in employment, if any. Bharti-AXA's product is being promoted as the one covering the maximum number of critical illnesses, but life insurers offering such covers take care of nearly 30-35 illnesses. Even the maximum sum assured goes up to . 20 lakh in some cases. The product covers the maximum number of critical illnesses only when compared to the general insurers' policies in this category. Also, some such covers in the market offer renewals even up to the age of 75.
WHY YOU CAN GO FOR IT:
Buying a critical illness cover to supplement your basic health policy helps replace any income lost during the treatment as well as the recovery period.
WHY YOU CAN AVOID IT:
While this policy covers 20 critical illnesses, some life insurers offer similar products that cover 30-35 critical ailments.
