Life insurance policies cover the risk of death of the policy holder during the coverage period. Besides the basic benefit, life policies offer a number of optional benefits to cover various other contingencies. One such useful addition is the critical illness benefit. This benefit is sometimes offered as a standalone product also.

Under this benefit, the life insurer pays a lump-sum amount in the event of the life assured getting diagnosed with any of the critical illnesses covered by the policy during the period of coverage. The amount paid is typically equal to or less than the sum assured under the base policy. The number of diseases covered varies from insurer to insurer, but cancer, stroke, coronary artery bypass, major organ failure, paralysis, etc, are generally covered.

Critical illness benefit is not an alternative to a health insurance or a 'mediclaim' policy offered by non-life insurance companies. In the case of a mediclaim, the benefit is limited to the expenses incurred on treatment, whereas the lump-sum benefit offered by a critical illness cover does not impose any such restriction.

In case of mediclaim, the benefit amount is restricted to the maximum of the incurred expenses or the sum assured, whereas in the case of a critical illness benefit, the complete sum assured is paid irrespective of the expenses incurred. A critical illness benefit complements the mediclaim benefit. While mediclaim takes care of hospitalisation expenses, critical illness benefit can be used to cover extra costs that may be incurred while seeking treatment for a dreaded disease.

To understand the nuances of different types of policies and its price, feel free to seek the help of InsuranceMall to select the right products based on your need. Or you can directly call them on +91-22-30503050

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