Things to keep in mind while adding a critical illness plan

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Critical illness plans are defined benefit plans that provide coverage for a specific list of diseases (ranging from 6 to 50 types of diseases, as specified by the insurer). If the policyholder is diagnosed with any one of these diseases, the policy pays a lump sum. It offers coverage that can help you handle medical costs related to life-threatening critical illnesses and lifestyle diseases such as paralysis, kidney failure, living disorders, stroke, etc.

I recommend supplementing your health insurance with a critical illness plan for three reasons. Firstly, health insurance plans mainly cover the cost of hospitalization. However, in case of a critical illness, several medical and non-medical expenses are incurred to meet the changed lifestyle of the patient. A lump sum amount can help offset these expenses. Secondly, if diagnosed with a serious illness, one can consider seeking a second opinion from reputed hospitals or undergoing experimental treatment in India or abroad. This covers substantial expenses, including travel expenses, that are not covered by standard health insurance policies. Lastly, a serious illness can reduce a person’s earning potential. In the short term, the individual may need to take extended unpaid leave. The person may be required to work with reduced capacity in the medium term. A lump sum payment can help cover this temporary loss of income.

I have bought a new SUV Fortuner and want to buy a comprehensive motor insurance for it. What add-ons must I look for in addition to buying a regular motor policy?

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For your new car insurance, I recommend three key add-ons. First buy zero depreciation cover. In the standard policy, replacement of most parts is subject to depreciation, which increases with the age of the car and is reduced by the claim payable. The add-on ensures that there is no reduction in the claim due to depreciation.

Second, is the engine protection cover. If the car is driven on a waterlogged road, water entering the engine can damage it. The standard policy does not cover this, so replacing the engine is expensive should this add-on be opted for.

Third, the important add-on is Return on Invoice (RTI). The Insured Declared Value (IDV) of the car depreciates every year. In case of total loss, only IDV is payable to the policyholder. However, this IDV amount may not be enough to cover the cost of buying a new car, which is why RTI add-on is important. In case of total loss, the insurer will pay the original invoice value of the car.

Abhishek Bondia is the Principal Officer and Managing Director of SecureNow.in.