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Critical Illness Insurance

A critical illness policy provides a lump sum benefit if you are unfortunate enough to contract one of the several covered critical illnesses such as a paralytic stroke, organ failure, cancer, etc.

The difference between this and a mediclaim policy is that a lump sum is paid irrespective of actual expenditure incurred on the policy unlike a mediclaim policy where only the eligible hopsitalisation expenditure is covered.

In short essentially the mediclaim policy helps you in dealing with the hospitalisation costs attached to all illnesses (including critical illnesses) whereas the Critical illness policy provides you a lump sum that can probably help you generate income to replace the loss in income as a result of the critical illness.

Factors to be considered:
A critical illness policy is more expensive than a life insurance policy for the same sum insured at the same age  simply because the odds of contracting a critical illness are higher than the odds of the insured person's death.

Look for the critical illnesses that are covered especially if you have a family history of any such disease.

Getting a critical illness policy from a general insurance company is a good option since renewability is ensured by IRDA regulation (except in the case of fraud, misrepresentation, etc.) till the maximum age indicated in the prospectus given to you at the time of taking the first policy. Premiums however will go up from year to year as indicated in the same prospectus as you age.

Keep a copy of all documents submitted to the insurance company for your future reference.

Any promise made by the agent or even an official of the insurance company has no value unless it is in writing or at least on email.

So if you are basing your decision on any such promise make sure you get it in record in some form.