How Critical Illness Health Insurance Plans Work?
To demonstrate how critical illness health insurance plans work, let’s take the example of Rajesh, who purchases a critical illness cover for himself for a sum insured of Rs.5 lakh. He pays the due premiums and renews the policy every year. During one such policy term, Rajesh suffers from a critical illness which causes him to be hospitalized for a few days. Rajesh’s total hospitalisation bills have come up to Rs.4 lakh. Rajesh receives a lump sum payout from the insurer after the 30-day survival period. He utilizes this amount to pay for his post-hospitalisation expenses and as an income replacement for the months that he does not work. The critical illness policy enabled Rajesh to get back on his feet smoothly, and not worry about his liabilities.