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Homework to Do Before Choosing the Best Critical Illness Insurance Plan

By Juhi Walia
02 September 2022, 4:57 PM

Critical illness health insurance helps you pay your medical bills if you're diagnosed with one of the pre-mentioned illnesses or conditions covered under your health insurance plan. But before purchasing a critical illness insurance plan, it's important to consider how much you need, what providers are available, and what exclusions or limitations might be associated with each policy to ensure you get the right coverage at the best price. While all critical illness health insurance plans have different coverage levels and premiums, there are some key factors that can determine which one is best for you.

This guide will help you choose the right critical illness health insurance plan which will benefit you the most and fit your requirements.

What is Critical Illness Insurance?

A critical illness health insurance policy provides a lump sum to the policyholders if/when they are diagnosed with a particular critical illness. 

The benefit can be used to help cover the costs of medical treatment, make up for lost income, or pay for other expenses related to your illness. A critical illness policy will typically require you to have health coverage for a specific length of time before purchasing it. This is why it's important to understand what a critical illness plan does and does not offer so that you can choose the best one for your needs.

Choosing the Best Critical Illness Insurance Plan

There are a few things to consider when choosing a critical illness health insurance plan.

  • First, you'll want to make sure that the plan covers the illnesses that are most important to you.
  • Second, you'll want to compare different plans and find one that fits your budget.
  • Third, you'll want to read the fine print and ensure you understand the terms and conditions.
  • Fourth, you'll want to choose a plan with a reputed company.

In addition to the points mentioned above, here are some valuable things to consider while choosing the best critical illness insurance plan:

Choosing Between Add-ons and Standalone

There are two main types of critical illness health insurance plans: standalone and add-on.

  • A standalone plan covers you in case you contract one of the covered illnesses but does not cover other benefits such as income replacement or home care.
  • An add-on plan can be purchased along with a comprehensive health insurance policy to cover your other needs in case you contract one of the covered illnesses. Critical illness health insurance is often paired with long-term disability coverage because they share similar coverage periods.

Illnesses and Diseases Covered

Consider whether the plan covers your needs or diseases you might have a predisposition to, like chronic heart disease or cancer. If not, look for a different one. A critical illness rider can cover less number of illnesses compared to a standalone critical illness policy. Before signing up, ask what's covered to assess if you have sufficient coverage. It's also important to find out about all potential side effects, such as pre-existing conditions, which could lead to lower payouts or exclusions on pre-existing conditions.

The Perfect Cover

As with any health insurance, you must review your policy and fine print. The policies will vary by provider, so you need to understand what's covered and whether you can upgrade to a more comprehensive plan in the future if required. Some things are standard with these policies, like pre-existing conditions—even critical illness cover may not cover a condition you could develop later. Pre-existing conditions can make it difficult to get health insurance coverage. Once you've read through the contract, you should consider other factors before signing up. Do you want additional income? If so, is there an option for disability payments? Or do you want to provide funeral expenses for your loved ones? It's easy to take out funeral expenses separately from life or critical illness plan because they usually have lower premiums and separate deductibles.

Inclusions and Exclusions of your Insurance Plan

Make sure to check the inclusions and exclusions of your critical illness health insurance plan so make sure you are getting the coverage you want. You may also be able to customize the plan as per your needs, so you don't end up spending more than you need to. 

Renewability and Age

Most critical illness health insurance policies are renewable, so you can continue your coverage as long as you pay your premiums. However, you may have to enroll in the policy up to a certain age limit. Most critical illness plans would allow you to be enrolled as later as you are 65. Check the policies with a lifetime renewability option and enhanced flexibility.

Special Plans

Some health insurance providers offer specialized health insurance plans for senior citizens and women. They take into account their needs and preferences. For example, Star health insurance has special plans for cancer and cardiac-related issues besides altogether separate critical illness policies. See if those special plans are worth your investment.

Claim Process

Before deciding which policy to choose, you should also examine two items. First, examine the health insurance claim settlement ratio. Make sure you only buy a policy from a company whose claim settlement rate is good. Risking your investment using a company with a low claim settlement rate can either mean unreasonable delays or a complete refusal. Secondly, be aware of how long it takes to process claims. Some policies can take up to two years before they are processed and paid out. While these plans may offer better coverage, they may not be worth it if the provider delays paying out the benefits. Look into this information when choosing a plan so that you do not find yourself in this situation down the line.

Waiting Process

A waiting period will be in place after signing up for a policy. You should pick the one with the shorter waiting period. For example, the waiting period for a critical illness cover is typically 90 days from the policy commencement date. This means that you will not be able to submit a claim request until 90 days after signing up for your policy. However, there can be disease-specific waiting periods too. 


When you are first diagnosed with a critical illness, it may take time to process. You may feel like you are in a fog and that everything is happening too fast. The good news is that you have time to decide about your care and treatment. Compare  health insurance policies online and choose the right option covering your needs for an affordable premium. One of the trusted platforms where you can do is Paytm Insurance, a renowned insurance marketplace.

Read more -


1. What constitutes a critical illness?

A critical illness is any condition that significantly impacts or prohibits your health and ability to live a normal life.

2. Which diseases would be considered critical illnesses?

Some common examples include cancer, heart disease, stroke, and Alzheimer's.

3. What documents will I need to submit to apply for critical illness insurance?

To apply for critical illness insurance, you need to submit your identity proof, age proof, address proof, and a medical test.

4. How much critical illness insurance coverage will I need?

The decision for your insurance coverage completely depends on your lifestyle, your residential area, your age, and your annual income.

5. Why is a critical illness benefit needed?

When you are affected by a critical health condition, your finances will likely be strained. Moreover, your loved ones will need financial security should you die during this period. By having a critical illness benefit on your term insurance plan, your family will be financially secure in the event of your absence, and you will be able to maintain your current lifestyle.

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