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Life Insurance Health Plans

Health Insurance Plans have hitherto been the priority for most Stand alone Health Insurance companies and the General Insurance companies. Now the Life Insurance Industry have also started offering Health Insurance plans which typically offer coverage for a Life Threatening disease like Cancer apart from Critical Illness.
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The key distinctions between the plans offered by the Life and Non Life insurance companies are briefly illustrated below:

Basis for Comparison Life Insurance Health Insurance
Meaning Life insurance is an insurance that covers the risk of life and pays out an assured sum on the happening of the specified event. Health insurance refers to a type of general insurance, which covers the medical expenses of the insured, but only up to the amount of sum insured.
Benefit Both survival and death benefits. Treatment and medical benefits.
Premium Lump sum or instalment Lump sum
Recovery of money Money invested can be recovered on the maturity of the policy. No money can be recovered at the end of the term, only the amount is reimbursed, in case of accident or illness
Term Long term Short term
Hence it is important to evaluate the Health Insurance Plan as well while deciding on a Health Insurance coverage. Since the plans are complementary in nature, in an ideal scenario, one should ideally invest in both plans to ensure comprehensive coverage for their health.

Let us look in slight depth regarding the Health Plans for Cancer, Critical Illness etc.

A. Cancer Cover

Cancer Insurance is a specialised insurance plan that offers financial coverage through insurance for those unfortunately diagnosed with the dreaded Cancer disease. This cancer specific policy offers coverage for all costs associated with the diagnosis and treatment of cancer, including hospitalization, surgery, radiation and chemo (if necessary). The coverage is available at all stages of diagnosis including minor, major and critical stages and importantly these are fixed benefit policies which means that the benefit amount is payable irrespective of the actual expense incurred in hospitalization. Also, cancer insurance policies generally do not offer death, maturity or surrender benefits. These plans also have a pre existing exclusion for cancer ailments.

One must evaluate the following while purchasing a Cancer Cover Plan:
  • Sum Assured – this needs to be sufficient for treatment of cancer, if it arises – but it will also depend on the income levels of the policy holder – no moral hazard.
  • Waiting Period and Survival Period.
  • Tenure of the Policy.

Purchasing a Cancer Insurance is worth it if:
  • The policy holder has a family history of cancer (of any part of the body).
  • Inadequate savings to take care of major illness that strike the family at an inconvenient time.
  • Lack of Comprehensive Health insurance coverage if one is the only earning member.

Benefits of Cancer Insurance Plans:
  • Lumpsum Sum Assured is paid on diagnosis of any of the covered forms of cancer.
  • Covers multiple stages of cancer – Minor, Major & Critical Stages.
  • Increase/Escalating Sum Assured for claim free years.
  • Premium waiver is available on detection of cancer to the policy holder.
  • Monthly income (under Regular Monthly Benefit) is paid out for a specified number of years subject to certain conditions, such as in case of major cancer diagnosis.
  • Insurance cover continues even after the diagnosis of cancer.
  • Tax benefits under section 80D of the Income Tax Act.

B. Critical Illness Plan

Critical illness plans normally cover a defined and named number of Critical Illnesses and they provide a lumpsum benefit on the diagnosis of any critical illness. While one may already have an individual health insurance plan or a health insurance coverage on their own or with provided by their organization, it may not always be sufficient to take care of ballooning medical expenses. Unlike health insurance plans, in this is a non participating non-linked health insurance plan the money can be claimed on diagnosis, the submission of hospitalization bills is not required.

Some of the features that the plans offered in the market are:
  • Multiple Claims Option : The insured can claim multiple times during the policy term.
  • Cover Against defined Critical Illnesses named under this plan – some of which are defined below:
  • Open Chest CABG.
  • First Heart Attack - of Specified Severity.
  • Open Heart Replacement OR Repair of Heart Valves.
  • Kidney Failure Requiring Regular Dialysis.
  • Major Organ Transplant (Heart, Kidney).
  • Stroke Resulting in Permanent Symptoms.
  • Aorta Surgery.
  • Aplastic Anaemia.
  • Cancer of Specified Severity.
  • Benign Brain Tumour.
  • Major Organ Transplant (Bone Marrow, Liver, Lung, Pancreas).
  • Permanent Paralysis of Limbs.
  • Coma of Specified Severity.
  • Major Burns.
  • Total Blindness.
  • Motor Neurone Disease with Permanent Symptoms.
  • Multiple Sclerosis with Persisting Symptoms.


  • No Hospital Bills required for a claims - All the insured needs is their diagnosis report to make a claim.
  • Waiver Of Premium : All future premiums are waived after the first claim.
  • Discount on large Sum Assured : Get discounts for higher Sum Assured.
  • Get lump sum benefit on the diagnosis of Critical Illness.
  • Tax Benefits : You can avail tax benefits under Section 80D and Section 10 (10D)

Benefit Description

Most products offer two options as follows:
  • Single Claim option
  • Multi Claim option
Critical Illness Benefit ** Single Claim option: Under this option, a lump-sum benefit equal to the Sum Assured will be payable on the survival of life insured for 28-30 days following the date of confirmed diagnosis of Critical Illness and the policy will get terminated.

MultiClaim option: Under this option, the life insured can get benefit for more than 1 claim. Subsequent to a claim, the Life insured will still be eligible for bene¬fits for other critical illnesses.

The benefits on each claim are as below and are payable on survival of life insured for a particular period (normally 28-30 days) following the date of confirmed diagnosis:
  • 1st Claim – Sum Assured is payable and all future premiums are waived off.
  • 2nd Claim – Sum Assured is payable.
  • Final Claim – Sum Assured is payable and policy will get terminated.
Conditions for Critical Illness:
  • Claim for critical illness will only be accepted if the illness has occurred after the expiry of 90 days from the date of issue/date of revival of the policy.
  • The life insured should survive the Survival Period from the date of confirmed diagnosis of the Critical Illness. The diagnosis is confirmed once it is established through medical tests or is certified by a medical practitioner.
  • 365 days waiting period is the minimum required time between two critical illness claims for Multiple Claim option.
Death Benefit No Benefit is Payable
Surrender Benefit No Benefit is Payable
Maturity Benefit No Benefit is Payable

Criticare Plus Exclusions

Some of the key exclusions under this plan are below…Please go through the entire list of exclusions in the terms and conditions of the policy. The following exclusions shall apply to the benefits admissible under this policy:

  • Any critical illness or its signs or symptoms having occurred within Waiting Period of policy issue date.
  • For a policy which was lapsed and has subsequently been revived, any critical illness or its signs or symptoms having occurred within 90 days of revival date.
  • For all pre-existing diseases or health conditions at proposal stage or reinstatement, the benefits would be available after 36/48/60 months from date of commencement or reinstatement. (Reinstatement would be applicable only for policies which were lapsed and subsequently been revived).
  • Unreasonable failure to seek or follow medical advice.
  • Existence of any sexually Transmitted Disease (STD) and its related complications or Acquired Immune Deficiency Syndrome (AIDS) or the presence of any Human Immuno-deficiency Virus (HIV).
  • Self-inflicted injuries, attempted suicide, insanity, and immorality, and deliberate participation of the life insured in an illegal or criminal act.
  • Use of intoxicating drugs / alcohol / solvent, taking of drugs except under the direction of a qualified medical practitioner.
  • War – whether declared or not, civil commotion, breach of law, invasion, hostilities (whether war is declared or not), rebellion, revolution, military or usurped power or wilful participation in acts of violence.
  • Radioactive contamination due to nuclear accident.
  • Engaging in hazardous sports / pastimes, i.e. taking part in (or practising for) boxing, caving, climbing, horse racing, jet skiing, martial arts, mountaineering, off pastel skiing, pot holing, power boat racing, underwater diving, yacht racing or any race, trial or timed motor sport, bungee jumping, hand gliding etc. or Any injury, sickness or disease received as a result of aviation (including parachuting or skydiving), gliding or any form of aerial flight other than as a fare-paying passenger on regular routes and on a scheduled timetable unless agreed by special endorsement.

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