What Health Issues Covered in Term Insurance in India?

Written by : Knowledge Centre Team

2024-01-01

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Medical bills are a major reason for financial debt in India. With more than 50 per cent of the population paying medical bills out of their earnings, health insurance has become the need of the hour. It provides an easy way to manage the unexpected medical costs. Different ailments are covered by your health insurance policy depending on the type of plan and the insurer you choose.

Amongst various covers for health, a term plan offers a number of benefits along with the advantage of a life cover. This ensures that the family or the nominee is financially secure and supported in case of an unfortunate event. Term plans are a more comprehensive option that provides a life cover with critical illness benefits, a voluntary addition to term insurance policies that cover the costs incurred in critical illness treatments.

Common Illnesses Covered Under Term Insurance

A term plan offers the sum assured chosen while buying the policy on your demise to the beneficiary or the nominee. In addition to this, it also provides critical illness coverage. It can help you tackle the challenges, both monetary and general, in case such a situation surfaces. Despite the rising awareness about health and fitness in all age groups, there is still an exposed risk of life-threatening diseases mentioned as follows:

Cancer: The term insurance plan covers the costs of treatment for illnesses like cancer when combined with an optional in-built cover - Critical Illness Benefit. This coverage also offers expenses for prescription drugs, health check-ups, tests, and other types of treatment up to a specific point. The cost of treating cancer varies from patient to patient, depending on the type and stage of the disease.
Heart Diseases: Numerous heart problems are becoming more prevalent as a result of our lifestyles. These include coronary artery disease and excessive blood pressure, the latter of which, in extreme situations, can potentially cause heart attacks. The last thing anyone diagnosed with heart disease wants is the additional stress of not having enough money to cover medical expenses or provide a safety net for their family. The plan can cover the cost of medicine, surgeries, and even cardiac rehabilitation if you choose a Critical Illness cover.
Lung Diseases: It is well-known that smoking can adversely affect your whole respiratory system, especially the lungs. However, because of pollution, people who don't even smoke might have conditions like asthma and Chronic Obstructive Pulmonary Disease (COPD). The constant stress in our lives has bred undesirable habits like smoking, drinking, eating junk food, etc., which have an impact on how the respiratory system functions. Environmental factors are also massive contributors to respiratory ailments. Smog, pollen, global warming, and illnesses impair the health of our lungs.

The term "respiratory diseases" includes allergies, asthma, and lung infections. Given that the Coronavirus outbreak also affected the primary respiratory system, having a term insurance that also covers these respiratory illnesses is crucial.

Kidney-Related Diseases: Kidney-related illnesses are another major health problem, particularly in the senior demography. Renal failure and other kidney-related disorders can be treated financially with the help of term insurance plans.
According to the Indian Renal Foundation, hemodialysis (12 sessions per month) costs about ₹12–15,000 per month, whereas peritoneal dialysis costs about ₹18–20,000 per month. When having a transplant, the patient often pays roughly ₹4 lakhs in addition to ₹15,000 to 20,000 for post-transplant medicine and care. It becomes tough to bear such a high medical cost of kidney failure. A renal dialysis or a transplant can deplete your savings and put your family members through emotional hardship. Therefore, it is highly recommended to include a critical illness benefit in your plan.
Diabetes: Our flexible diet and decreased physical activity have made diabetes one of the most common lifestyle diseases in modern times. Term insurance can help pay for diabetes treatment expenses like prescription drugs and hospital visits.

Learn more about how a term insurance plan work for diabetics.

Term insurance with a critical illness benefit that covers diabetes offers financial protection to diabetics (including pre-diabetics and Type-II diabetics) in the event of diagnosis. If you pass away within the policy term, these plans also pay the sum assured to the beneficiaries or nominees. Your family's financial commitments, such as your child's education and any outstanding loans or liabilities, can be taken care of using the death benefit they receive.

Term insurance, as well as health insurance, are good options to secure your future and make sure your loved ones are supported with financial aid in your absence. However, it is better to know which plan suits your needs and circumstances better. For instance, if you have a family that is dependent upon you, completely or partially, a term plan with an additional critical illness rider would work for you better as it provides cover for illness treatment as well as a sum assured to your nominee. On the other hand, if you don’t have a nominee or a beneficiary who would need financial aid after you, a term plan might not be the best choice; instead, health insurance would suit you better as it will cover almost all your medical costs in your lifetime and there will be no need to pay a premium for a life cover.

Here is a tabular differentiation of term and health insurance.

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Term Insurance vs Health Insurance

Life insurance is a vital financial instrument to have today. Although there are various types of life insurance, the most popular ones are term insurance and health insurance. Both have their own benefits and limitations; thus, it's imperative to differentiate between health insurance and term insurance to determine the most suitable coverage for your needs.

These two insurance types play distinct yet vital roles in protecting your health and financial security. Health insurance primarily addresses medical expenses and healthcare costs, while term insurance is tailored to create a financial safety net for your family in the unfortunate event of your passing.

Keep scrolling to gain a deeper understanding of the difference between health plan and term plan.

Basis	Term Insurance	Health Insurance
Definition	Term insurance is a type of life insurance. This means that if the policyholder dies within the policy's set time frame, the beneficiaries of the insurance will get an assured sum as a death benefit, enabling them to continue living comfortably, paying their debts, and pursuing their financial goals.	Health insurance is an agreement between the policyholder and the insurance company that provides financial help in case the insured is in need of medical care. The payout is often limited to the lesser of the actual expenses incurred or the amount covered.
Purpose	Provides financial security for loved ones in case the policyholder dies during the term.	Helps cover medical costs for illnesses or injuries, providing financial support when needed.
Payout/ Sum Assured	Pays a lump sum (death benefit) if the policyholder passes away during the policy term.	Covers medical expenses based on the treatment needed, up to the policy limit.
Renewal	Typically, premiums remain constant, and there's no reward for renewing.	Can offer a No-Claim Bonus (NCB) if no claims were made during the previous policy period.
Types	Standard Term Insurance Plan, Term Insurance with Riders and Options, Increasing Term Insurance, Decreasing Term Insurance, Convertible Term Insurance Plan	Individual Health Insurance, Unit Linked Health Plan, Family Health Insurance, Senior Citizen Health Plan

Conclusion

By extending coverage to health conditions such as heart disease, cancer, diabetes, mental health disorders, and accidents, term insurance providers demonstrate a profound commitment to the well-being of their policyholders.

In the face of rising illnesses, medical costs and the unpredictability of life, term insurance emerges as a ray of sunshine, offering financial protection and peace of mind. Canara HSBC Life Insurance Young Term Plan provides coverage against 40 listed critical illnesses with Child Care Benefit, Spouse Coverage, Special Exit Value, and Block your Premium feature.

In the Critical Illness cover, there are 40 listed illnesses, including Cancer, Myocardial Infarction (First Heart Attack of Specific Severity), Open Heart Replacement or Repair of Heart Valves, Kidney Failure Requiring Regular Dialysis, etc. that are covered. By acknowledging the prevalence of these health issues, insurers empower individuals to confront health adversities with resilience and determination.

Disclaimer: This article is issued in the general public interest and is meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.

FAQ

No, term insurance typically does not cover medical expenses. However, there are term insurances that offer critical illness treatment cover along with life cover when clubbed with a critical illness benefit. It covers the cost of 40 critical illnesses, such as cancer, heart ailments, kidney-related problems, etc., that can support you financially at the time of treatment and hospitalization.

Health insurance assures financial compensation for your medical expenses incurred in the treatment and hospitalization of a critical illness. On the other hand, term insurance provides a sum assured to your nominee/ beneficiary after you. It also pays for critical illness treatment if you opt for the additional critical illness rider.