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Critical Illness Cover vs Terminal Illness Plans

  12/29/22 10:51 AM

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Whether it is marketing over television, radio or billboards, or pop-ups over the internet, insurers are increasingly trying to contribute to financial literacy and equipping you with information to make the right financial decisions. When it comes to insurance, not one size fits all. While the basic premise of life insurance is protecting the financial interests of your family post your death, there are many variants. Critical Illness Health Insurance and Terminal Illness Insurance are two of them, and contrary to the general understanding, they’re not the same.

Critical Illness Cover vs. Terminal Illness Treatment Cover

To put it simply, critical illness is an illness that is serious but can be cured through intensive medical treatment. Whereas a terminal illness is one in which the illness is quite grave, and no further treatment can be done to cure it.

How Does Critical Illness Health Insurance Work?

When a critical illness cover is added to an existing insurance plan, it works out in the following manner. If a person is diagnosed with any of the critical illnesses specified in the policy term, the insurer pays a lump sum to the policyholder immediately, irrespective of the policyholder's life expectancy. The illnesses which are generally covered by a critical illness cover are cancer, heart diseases, head injuries, total or permanent disabilities, etc. The policyholder needn’t show any proof of hospitalization or provide any medical certificate.

A critical illness insurance policy cover is ideal for those people who are concerned that they won't be able to cover their financial obligations or maintain a healthy standard of living if they are diagnosed with a critical illness.

How does a Terminal illness cover differ from Critical Illness Health Insurance?

A terminal illness cover is concerned with paying out the insurance money to the policyholder if they are diagnosed with a serious illness, and the life expectancy is less than 12 months. When a terminal illness cover is included in a life insurance policy, the policyholder has the option of knowing that they will be financially well provided for.

A Terminal illness treatment cover is suitable for people who are more concerned with putting their finances in order before their demise and want to speed up the payout process. Most insurance plans already include a terminal illness cover at no extra cost.

Therefore, if you are considering buying an insurance plan or wanting to review your existing insurance policy, you must understand the difference between a critical illness policy cover and a terminal illness cover. Both these options can provide you with valuable benefits at different stages of life; it is up to you to choose which cover would be ideal for you to achieve your financial goals. You can also buy the critical illness cover online as per your convenience.


Aastha Mestry - Portfolio Manager 

An Author and a Full-Time Portfolio Manager, Aastha has 6 years of experience working in the Insurance Industry with businesses globally. With a profound interest in traveling, Aastha also loves to blog in her free time.

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