Be secure with your health insured

Insure yourself against critical illnesses and you will not be left high and dry when you are sick.

Do you know that 71 per cent of working Indians CANNOT survive financially for more than 52 weeks if they are unable to produce income from their workplace?

India is home to over 60 million coronary heart patients.

India's economic loss due to heart related disease could be $236 billion till 2015.

At any given time there will be 3 million cancer patients in India.

Source: World Health Organisation (WHO)

This is significantly alarming and indicates a lack of awareness towards the relevance and need for health insurance, in the backdrop of rising healthcare costs and an increasingly stressful life that leads to a higher susceptibility to major illnesses.

Due to medical advances, more and more Indians are surviving major medical crises "" cancer, strokes, heart attacks, and kidney failure. Medical care has increased life expectancy resulting in people surviving a critical illness that would have previously resulted in death.

We realised that many individuals who have been diagnosed with what at one time were considered fatal illnesses are now overcoming the odds and surviving. Unfortunately, traditional life insurance is not designed for survivors.

The problem, however, exists when any person suffering one of these critical illnesses has to take leave from work in order to recuperate. In almost all cases, the time period needed to properly recuperate is anything from three to 13 months and sometimes longer.

During this time period, the insured is unable to work, usually without income, or at a decreased temporary income, yet he/she and his/her family still have to live, eat, pay the mortgage, insurance, school fees, etc.

A critical illness plan means we can insure ourselves against the risk of serious illness in much the same way as you insure your car and your house. A critical illness policy is a product that pays a lump sum benefit to the insured upon diagnosis of a covered condition such as:

BENEFITS & ADVANTAGES

Insured can opt for Sum Assured from Rs 1 lakh to Rs 50 lakh

Premium paid is exempt under the Income Tax section 80 D

Very competitive premium rates

The benefit amount is payable once the disease is diagnosed meeting specific criteria and the insured survives 30 days after the diagnosis

The insured receives the amount as lump sum so that he can plan the treatment accordingly

Expenses like donor expenses in a transplant surgery, which are not covered under normal health insurance policy, can be paid out of the amount received under this cover both in India and abroad

Claims procedure: The insured needs to submit the claim from along with certificate from the specialist-confirming occurrence of the critical illness

Medical examination may be required in some cases based on the age and the benefit amount opted by the proposer

A critical illness policy eases the financial pressure by providing a lump sum payment upon diagnosis of a covered condition. The proceeds can be used by the insured for ANY purpose with no restriction.

There is NO necessity for the insured to die in order to receive the benefits, as the policy pays out whether the policyholder lives or dies.

USE YOUR LUMP SUM ANY WAY YOU WISH

Non-medical expenses resulting from your condition

Mortgage payments

Treatments not covered by traditional medical insurance

Extended convalescence

Alter home or automobile for special disability needs

Childcare

Or any other bills you may have

This policy enables the insured to continue to live in dignity and security while it also keeps the family united. People can now feel secure in knowing that they have the ability to access necessary funds during a major illness to bring security, comfort and stability back into their lives while recovering.

This in turn minimises the emotional stress and anxiety brought by financial hardship caused by illness and temporary disability.

Just like making a will, thinking about critical illness insurance is something that many people prefer to put off until later. But, do remember that we are all at risk and sooner or later, it could be you who is diagnosed.

How grateful would you be to have a critical illness insurance policy to support you in those troubled times? Would a tax-free lump sum payment be the answer?

If so, critical illness insurance is the cover for you. No one expects to become ill but ask yourself one question "" do you know anyone who has recently contracted a serious illness that has changed his or her lifestyle? If so it could be you they talk about next time

TO SUMMARISE

A critical illness policy is a new type of insurance.

It pays out a lump sum upon diagnosis of a covered condition.

This enables the insured to survive financially while physically recuperating.

The policy covers many illnesses, can also cover other contingencies such as death, paralysis, blindness, etc.

Usually the policy ceases after payment of claim.

(The writer is head of financial planning at Sykes & Ray Equities and can be reached at kairav@sre.co.in  )