Critical illness insurance is often misunderstood, leading many to make uninformed decisions. This type of insurance provides a lump sum payout if you are diagnosed with a serious illness covered under the policy. However, due to various myths, people hesitate to purchase it or hold incorrect beliefs about its coverage and benefits.

Let’s break down some of the most common misconceptions about critical illness insurance and understand the facts behind them. 

1. “Health insurance and critical illness insurance are the same”

One of the biggest misconceptions is that regular health insurance and critical illness insurance serve the same purpose. While the former covers hospitalisation expenses, diagnostic tests and treatments, the latter provides a lump sum amount upon diagnosis of a specified illness. This payout can be used for:

●       Covering treatment costs

●       Paying off debts

●       Managing household expenses during recovery

●       Seeking advanced medical care

●       Investing in alternative treatments if necessary

●       Taking care of post-treatment rehabilitation expenses

●       Securing financial stability for dependents

2. “Only older people need critical illness insurance”

Many assume that critical illness insurance is necessary only for older individuals. However, with the rise in lifestyle diseases, even younger people are at risk. Critical illnesses like heart disease, cancer and stroke can occur at any age due to factors like stress and unhealthy lifestyles.

Buying a policy early comes with multiple benefits:

●       Lower premium rates

●       Comprehensive coverage without pre-existing conditions

●       Financial security in case of unexpected medical conditions

●       Peace of mind knowing that you're prepared for unforeseen circumstances

●       Higher chances of policy approval with fewer exclusions

●       Protection against rising healthcare costs

3. “Employer-provided insurance is enough”

Many rely solely on employer-provided health insurance, assuming it will cover all medical expenses. However, such policies often have limited coverage, exclusions and may not be sufficient for severe illnesses.

4. “Critical illness plans cover all medical conditions”

Not all illnesses are covered under a critical illness insurance plan. Policies generally include specific conditions like cancer, kidney failure, heart attack, stroke and organ transplants. It’s crucial to read the policy document carefully to understand what is covered and what’s not.

If you have a family history of certain diseases, ensure the plan includes those conditions to get the best coverage.

5. “The payout covers only medical expenses”

Unlike health insurance, which reimburses medical expenses, critical illness insurance provides a lump sum payout that can be used for any financial needs. This means you can use the funds for:

●       Treatment and hospitalisation

●       Paying off loans

●       Household expenses during the recovery period

●       Home modifications or specialised care

●       Child education expenses, ensuring your family's financial stability

●       Loss of income due to inability to work during treatment

●       Expenses related to lifestyle adjustments required post-illness

6. “Premiums are too expensive”

Many believe that critical illness insurance is costly, but this is not always true. Premiums depend on factors like age, coverage amount and medical history. Buying a policy early reduces the premium cost significantly.

7. “I won’t need it since i maintain a healthy lifestyle”

While a healthy lifestyle reduces risks, it does not eliminate them. Even fit individuals can be diagnosed with critical illnesses due to genetic factors or unexpected health conditions. Having critical illness insurance ensures that if such an unfortunate event occurs, you are financially prepared.

8. “Claiming the payout is a lengthy process”

Many people think insurance claims are complicated and time-consuming. However, some insurers have health insurance apps that allow for a quick, easy and convenient claim process.  Most insurance providers follow a streamlined procedure:

●     Submit the diagnosis report and required documents.

●     The insurance company verifies the claim.

●     Once approved, the lump sum is disbursed within a few days.

9. “Pre-existing conditions are always covered”

Pre-existing conditions may not be covered immediately. Most insurers have a waiting period of 2-4 years before covering such diseases. It’s essential to check the waiting period and exclusions before purchasing a policy.

10. “Critical illness insurance is only for hospitalisation costs”

Critical illnesses often require prolonged treatment, rehabilitation, or even lifestyle changes. The lump sum payout can also help with:

●       Home nursing and rehabilitation care

●       Mental health support and counselling

●       Travel expenses for specialised treatment abroad

●       Palliative care or end-of-life support for critical conditions

●       Covering costs of experimental treatments that may not be included in health insurance

Conclusion

Understanding the realities of critical illness insurance helps you make informed decisions about your financial security. Investing in a comprehensive plan ensures that you and your family remain financially stable in times of medical emergencies.