New Delhi: As healthcare costs are on a constant rise, planning financial resources towards unanticipated medical costs is absolutely imperative especially with the rise in the number of health cases owing to higher stress levels, lifestyle changes, etc. Buying a health insurance plan for yourself or your family has become absolutely necessary given the increasing costs of quality healthcare in India.

However, there are instances when the existing policy may not meet all kinds of family’s medical needs due to some limitations, exclusions, or cappings. But buying a second policy may not be a pocket-friendly option for many.

A lot of people are now opting for these riders due to the greater costs that these critical illnesses incur and due to the rise in lifestyle-related ailments. Satishwar Balakrishnan, CFO and Principal Officer, Aegon Life Insurance said: “A higher number of Indians are waking up with life-style diseases today than a few years ago. National estimates indicate that 1 million out of every 4 million Indians are at higher risk of non-communicable diseases such as cardiovascular ailments or cancer before the age of 70.”

“Today, such diseases are within the family and many of us are witnessing the gradual change at a macro level too. Such illnesses often incur greater than average medical costs and CI benefits pay out cash to help cover those overruns where traditional health insurance may fall short. Hence, even when one holds a health insurance cover it is time to consider creating a buffer through critical illness plans and riders,” Balakrishnan added.

Rashmi Nandargi, Head – Retail Health Underwriting, Bajaj Allianz General Insurance said: “We are seeing an increase in the demand for policies covering critical illnesses like cancer, organ transplant, heart diseases, etc. with significant emphasis being laid on health maintenance and preventive measures through wellness activities.”

Who needs to buy critical insurance riders?

More often than not people are in a fix that whether or not they should buy a critical insurance rider. So, some of the deciding points while making this decision are a family history of the specified critical illnesses, when should people invest in such covers, etc. 

Sanjay Datta, Chief-Underwritings, Claims and Reinsurance, ICICI Lombard: “Customers with a family history of the specified critical illnesses, who are pre-disposed to these set of critical illnesses, generally opt for the critical illness optional cover. A health cover must be purchased, only post careful evaluation of one’s health care needs and study of policy terms and conditions. If the objective is to have an additional cover for the specific critical illnesses, one must opt for the critical illness optional cover.”

Balakrishnan added, “It is generally suggested to get the CI cover before the age of 40, before the premiums become expensive. However, buying early still helps as health risks are less and so is the premium.”

What are the benefits?

Riders enable policyholders to avail of a lump sum (sum assured) amount in case they are diagnosed with critical illnesses mentioned in the policy wording. Thus, it can protect the policyholder and their family from any financial crunch that may arise due to some unforeseen critical illnesses.

Nandargi said: “The insured member can utilize the sum insured amount for treatment of the disease, lifestyle changes, donor expenses, or a planned treatment outside India, etc. as well. Another benefit is that the premium for the critical illness cover is affordable but has widespread coverage. Critical illness provides coverage for treatments that may not be a part of one’s traditional health insurance policy.”

Subramanyam Brahmajosyula, Head – Underwriting & Reinsurance, SBI General Insurance said: “While a standard health policy would cover the insured person for expenses incurred during hospitalisation, a critical illness policy will provide a lump sum benefit in the event of the insured person being diagnosed with any of the named critical illnesses covered under the policy.”

The best thing is that a critical illness rider is available at a lower premium rate than the premium paid for second health insurance. One can buy it to complement the existing health insurance.