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Critical Illness Cover
Critical illness insurance pays a lump sum on diagnosis of cancer, heart attack, stroke, kidney failure, paralysis, or organ transplant. Separate from health insurance — covers loss of income too.
Critical illness covers cancer, heart attack, stroke, kidney failure, paralysis, organ transplant — paid as lump sum on diagnosis. Separate from health insurance which reimburses hospitalisation.
How it works
Critical illness (CI) cover pays a lump sum on diagnosis of a listed illness — typically cancer of specified severity, first heart attack, stroke, kidney failure, multiple sclerosis, major organ transplant, paralysis. We size the cover as: estimated treatment cost in a Tier-1 city hospital + 24 months of your income (to cover recovery / job loss) + outstanding home or personal loan EMIs × 24 + dependant living costs. Subtract any existing CI rider on your term policy.
Worked example
A 38-year-old Bengaluru tech employee earning ₹25 lakh CTC with a ₹1.2 crore home loan: cancer treatment at HCG or Tata Memorial can run ₹15–25 lakh for chemo, surgery and radiation. Add 24 months income loss (~₹30 lakh post-tax) plus 24 EMIs at ₹95k (~₹23 lakh). Recommended CI cover: ₹75 lakh–₹1 crore. Premium for a 38-year-old non-smoker is typically ₹12,000–₹18,000/year for ₹50 lakh CI from HDFC ERGO, ICICI Lombard or Niva Bupa.
When to use this
- Buying a fresh CI policy alongside Star Health or HDFC Optima Restore
- Adding a CI rider to an LIC Jeevan Anand or HDFC Click 2 Protect term plan
- Renewing a corporate group CI cover after a job change
See our explainers on critical illness vs health insurance and the CI rider on term plans.
FAQ
How is critical illness different from health insurance?
Health insurance reimburses hospitalisation expenses. Critical illness pays a LUMP SUM on diagnosis — even without hospitalisation. Used for income replacement.
Single premium or annual?
Single-premium policies (10-year cover) work out cheaper. Annual offers flexibility but pricing rises with renewals.
Standalone or rider?
Rider with term insurance is cheapest. Standalone gives more comprehensive cover. For young earners, term + rider often suffices.