What is Critical Illness Health Insurance Policies?

Critical illnesses can strain both your health and finances. Ideally, you need access to top-tier healthcare services and a reliable funding source, especially given the costly treatments. This is where critical illness health insurance plans come into play, offering a unique advantage.

Suppose you're diagnosed with a critical illness. In that case, your insurer disburses a lump sum, which you can use for treatment, meeting other financial liabilities, or simply setting the amount aside for future family requirements. However, the sum insured shouldn't be your sole criterion when selecting a plan. Instead, you should consider the number of illnesses covered, the quality of the insurer, restrictions on coverage and a few other things before you make a decision.

With that introduction out of the way, let’s look at the top critical illness health plans in the market for 2023.

Best Critical Illness Health Insurance Plans

Now that we have the list of the best critical illness health insurance policies across the industry, let’s look at these plans in a little more detail.

How to Determine the Best Critical Illness Health Insurance Plans?

1. The number of critical ailments covered - Look for plans that cover a sufficient number of critical ailments, but also consider the quality of ailments covered. It’s very easy for insurance providers to stuff a bunch of rare illnesses and market them aggressively. However, you want to make sure that the insurers cover common critical diseases like cancer and heart conditions. Once you have that sorted, you can look at the total ailments covered. A number above 30 illnesses is usually good enough.
2. Staggered/Lumpsum payout option - Health insurance providers usually offer the critical illness cover payout over two options -

• Staggered

Imagine this - Avinash took up a critical illness health insurance plan when he was 23 years old. 6 years later, he was diagnosed with end-stage renal failure.

His sum insured of ₹30 lakhs (with a staggered claim payout) gets paid out to him and his family over pre-decided instalments.

His family and loved ones can now use the payout to fund Avinash’s treatments (domestic and overseas), meet any financial liabilities, and more.

• Lump sum

Say, Binny, a 25 year old avails of a critical illness health insurance policy and chooses the lumpsum payout option. 4 years later when she gets diagnosed with a benign brain tumour, she submits the reports to her insurer and raises a claim.

Her insurer cross-checks the medical tests and reports and then offers her the entire sum insured in one go. She is now free to use this amount for her treatments, set aside a certain share for investments/savings, save ahead for life-stage events for her family, and meet certain financial liabilities like loans, EMIs, etc.

(Please note that at times, if a policyholder has opted for a staggered payout, and during payout desires a lumpsum payout, it can be done. However, this is completely dependent on the insurer in question.)

In the case of critical illness, it is always best to side with an insurance policy that either offers both the options of staggered and lumpsum, or just the lumpsum mode. This offers you the financial freedom to do as you see fit with the total sum insured.

3. Sum insured - The sum insured should cover treatment, financial liabilities, and future family needs. A plan offering coverage of ₹25 lakhs or above is a good choice.

4. The credibility of the insurer - As we said, with a critical illness cover, you are looking at a disbursal of a lumpsum amount. And you will be paid off only when you have been diagnosed with a critical disease. So, a lot rides on the credibility of your chosen insurer. You don’t want a provider who would hesitate when it’s time to pay up.

Choose a health insurer with -

• High Claim Settlement Ratio
• An extensive network of partner hospitals
• Low complaint volume
• Rapport of great operational proficiency
• Extensive product portfolio

You can also check our comprehensive guide on the best health insurance providers.

5. Pre-existing ailment coverage/ waiting period

Usually, critical illness plans exclude pre-existing diseases or impose long waiting periods before they extend coverage. So a good rule of thumb is to make sure that the insurer covers pre-existing illnesses and that they have short waiting periods associated with them. A waiting period of 3 years is decent.

6. The survival period clause

Critical illness health insurance policies come with a survival period clause. So what is a survival period?

Say, Vivek availed of a critical illness health insurance plan (with a survival period of 30 days) and a couple of years later gets diagnosed with a severe end-stage lung infection. Now, he must live for 30 days after diagnosis to receive the lump sum payout. If he dies within this period, he won't receive the policy benefit.

So, choose a plan with a minimum survival period.

Based on the factors listed above, here are some of the best critical illness health insurance policies.

What are the Best Critical Illness Health Insurance Plans?

(i) Aditya Birla - Activ Secure Critical Illness Plan

Aditya Birla is a strong player in the health insurance industry and its diversity in product portfolio has also caught the attention of experts and potential policyholders. The critical illness plan from this stable appears viable for those seeking coverage for a  very high number of ailments -

• Number of ailments covered - Base Level (20), Comprehensive (50), Complete all-round protection(64)
• Coverage offered: Up to ₹1 Cr
• The claim payout option is the lumpsum mode, which is offered upon the diagnosis of a critical ailment.

The plan is a standalone policy with a survival period of 15 days, a payout of up to 150% of your sum insured in case you are diagnosed with more than one critical illness listed in your plan, and optional covers of wellness coach and second e-opinion.

Drawbacks: The coverage for pre-existing diseases is excluded.

(ii) ManipalCigna - Lifestyle Protection-Critical Care

Manipal Cigna is generally famed for its group insurance plans but is yet to leave an impression on potential policyholders and thus gain a sizeable market presence in the retail. Similarly, its health insurance plans generally do not bring in any unique offerings. However, its critical illness cover is an overall decent option with features like -

• Coverage for 30 critical ailments
• Sum insured: either ₹3 Cr or up to 10 times your annual income
• Options for lumpsum or staggered claim payout

The plan also offers a very interesting feature where they extend an additional 10% of the sum insured as compensation if there are issues or delays during the claim settlement process

Drawbacks: The plan excludes pre-existing conditions completely and is pricey.

(iii) Niva Bupa - CritiCare Insurance Plan

Niva Bupa, previously known as Max Bupa, has one of the best critical illness health insurance policies in place - CritiCare. The plan provides -

• Coverage for 20 critical ailments
• A sum insured of up to ₹3 Cr.
• Survival period of 30 days
• Inclusion of pre-existing conditions
• Lump sum claim payout option.

In many ways, the plan does what you expect it to do and it’s a good choice for people looking to buy an affordable critical illness plan with a large cover.

Drawbacks: Niva Bupa’s support quality paired and the volume of the complaints is something that you should keep an eye out for.

(iv) HDFC ERGO - Critical Illness health insurance Platinum plan

HDFC ERGO is without a doubt, one of the best health insurers in the current market as is its Critical Illness health insurance Platinum plan. The plan’s highlighted features are as follows -

• Coverage offered -  Up to ₹50 Lakhs
• Survival period of 30 days
• Option for lump sum disbursal of the sum insured during payout

Though the coverage capping is lower than what other similar policies offer, it includes major illnesses like cancer, stroke, Parkinson's, Alzheimer's, and cardiac conditions. Plus, you're dealing with a top insurer known for excellent claim settlement, low complaints, a strong track record, and a vast network of partner hospitals.

Drawbacks: Well, HDFC ERGO is a great insurer, but its plans are comparatively expensive. And since the critical illness policy covers only 15 conditions, you could ask whether this plan is value for money.

(v) CARE -  Care Critical Mediclaim

Care has a large presence in the market and they are one of the biggest insurers in the country. Their plans are usually affordable and flexible and they impose no loading charges. And much like their other plans their critical illness policy Care Critical Mediclaim offers its policyholders  -

• Coverage for 32 critical ailments,
• Ambulance cover (₹3k/hospitalisation)
• Global coverage (if the sum insured is over ₹1 Cr, with a copayment of 10%/claim)
• Inclusion of pre-existing conditions

With coverage of up to ₹2 Cr and affordable premiums, this plan offers extensive coverage if you’re expecting the insurer to cover just your treatment costs. However, since the plan doesn’t disburse a lump sum amount, this critical illness plan doesn’t rank very highly on our list.

Drawbacks: The plan imposes a 4-year waiting period for pre-existing diseases. There is no lumpsum disbursal. Additionally, Care’s recent complaint volume is a matter of concern.

Super Top-Up Alternative: Also, as we already stated this plan only covers treatment costs and it doesn’t offer a lump sum amount. So technically you could also look at other affordable plans and those that extend a large cover. For instance, Care Enhance, the company’s super top-up policy covers pretty much everything and doesn’t restrict itself to a bunch of critical illnesses. You can consider this as an alternative.

Should you avail of Critical Illness Health Insurance Covers?

Critical illness plans only make sense if the insurance provider pays a lump sum in the event you are diagnosed with a complicated disease. This way you can choose to use the money any way you want. However, if your critical illness plan only pays for treatment costs then maybe you have better alternatives i.e. a super top-up plan. These are usually more affordable and offer better coverage.

So yes critical illness plans make sense if you already have a base policy that covers most of your hospitalization needs and you are looking for some added financial protection.