October 8, 2022

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Here’s How a Critical Illness Can Disrupt Your Financial Planning

Here's How a Critical Illness Can Disrupt Your Financial Planning
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No matter how much you like to plan things in your life, no one is immune from crisis. These emergencies and crisis situations appear unannounced. When they arrive, they can throw your life off balance and cause disruption. Critical illness can put immense pressure on you and your savings. That is why you need a critical illness insurance.

 

Why is Critical Illness Insurance Necessary?

Today we live extremely stressful lives that has exposed even the younger population of India to diseases that were earlier diagnosed in older people. It is common to see heart diseases in young adults due to poor food choices and sedentary lifestyle.

Critical illnesses can not only take an emotional toll on a person but also a financial one. But when you invest in a critical illness plan, you can rest assured that you have the protection of a robust health plan that will cover you financially and give you access to quality healthcare when you need it the most. Other than taking care of your medical bills, it can also act as an income replacement for the time you are recovering from your illness. Not having a critical illness insurance in your investment profile will put a huge dent in your savings if you are ever diagnosed with a life-threatening condition.

 

Benefits of a Critical Illness Plan

A critical illness insurance will see to it that your finances are not jeopardised. It is during this that the importance of health plan becomes apparent.

In the event that you are diagnosed with a serious pre-listed, health condition, your policy benefits will kick in and a lumpsum amount will be paid to you by the insurer. Unlike a health insurance plan that deals directly with the hospital or requires you to submit hospital bills, a critical illness plan needs no such thing. You can use the funds as you like. It can be used to pay for your treatment, doctor consultation, post-hospitalization expenses, other expenses that occur due to your illness, etc. These funds will also act as an income replacement for the days or months you are unable to go to work. While there is very little you can do to prevent this crisis from happening, you can take necessary steps at the right time to prevent it from ruining your finances.

 

Here are Some Reasons Why You Must Consider Investing in a Critical illness Plan.

why you must consider investing in a critical illness plan

  1. Income replacement

When you are diagnosed with a serious ailment, you are not only affected physically but also financially. A critical illness plan will pay you a lumpsum amount that you can use as per your discretion. It provides necessary funds to pay for your treatment as well as your household expenses during the weeks or months you take to recover from your illness.

  1. Tax benefits

A critical illness plan offers tax benefits to its investors by making your pay-out tax free u/s 80D of the income tax act. It means that the lumpsum amount you receive will be tax exempted.

  1. Peace of mind

With the protection of a robust critical illness insurance, you can have the peace of mind that you will have access to the best healthcare, and you can focus on your recovery without worrying about medical bills.

  1. Covers treatment abroad

Some critical illness plans also allow you to take your treatment abroad. It means that your policy will support you financially if you want to seek treatment out of India.

 

Critical Illness Rider

If you already have a health insurance plan and do not want to buy a critical illness cover, you can consider investing in a critical illness rider that can be added to your existing policy for a nominal price. As is the case with standalone insurance, this rider too protects you against major illnesses, such as liver failure, kidney failure, cardiac condition, blindness, etc. If you are diagnosed with a critical illness listed in the policy document, your insurer will give you the lumpsum amount as ordained by your insurance.

Our lifestyle has changed significantly these days, exposing us to the risk of life-threatening diseases, even at a young age. That is the reason it is a good idea to buy a critical illness insurance policy to protect yourself as well as your finances against the onslaught of critical ailments. However, that doesn’t mean your critical illness insurance can substitute your regular health insurance. In fact, you must have these both in your investment portfolio to provide yourself and your loved ones with comprehensive coverage.

It cannot be stressed enough that diagnosis of a critical illness can be a harrowing experience for a family. Therefore, consider buying a standalone policy or a critical illness rider to provide yourself with an added layer of protection.