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Terminal Illness vs Critical Illness

  • Author :
  • TATA AIG Team
  • Published on :
  • 18/07/2022

Health insurance has become one of the most important aspects in today’s scenario. The pandemic has also highlighted the need for a health insurance policy so that you can safeguard your finances in case you get hospitalised due to an illness. When buying a health insurance policy, you must have come across various riders. Two of the most important covers that you can opt for are terminal illness insurance and critical illness insurance.

Many people tend to get confused about the difference between terminal illness and critical illness. So, we have listed out all you need to know about terminal illness vs critical illness. But, before we get into the details, it is essential to know that having a health insurance policy has become a necessity, and it provides coverage to you if you face an emergency medical situation.

With Tata AIG, you can get a health insurance policy online at affordable prices. You can choose from the options available to you according to your requirements. You can also file a cashless claim at any of our network hospitals. The benefits of health insurance are far superior to the cost that you pay for it, so having a suitable plan is ideal.

Now let us get into the details of terminal illness vs critical illness.

What is Terminal Illness?

A terminal illness is a type of illness that cannot be cured. Due to the prevailing lifestyles, people have become increasingly prone to such illnesses. These illnesses are life-threatening in nature, and there is almost no chance of survival. Terminal illness examples include Alzheimer’s disease, organ failure, paralysis, etc.

What is Critical Illness Meaning?

Critical illnesses are those types of illnesses that are serious in nature but are curable by intensive and advanced medical care. Some of the common examples of such illnesses include heart attack, stroke, cancer, kidney failure, etc.

Thus, now you know the critical illness meaning, let us get into the details of terminal illness vs critical illness insurance.

Terminal Illness vs Critical Illness Insurance

Here are the details of the difference between terminal illness insurance benefits and critical illness insurance.

Parameters   Critical Illness Insurance  Terminal Illness Insurance 
Coverage Provides coverage for critical illnesses such as stroke, cancer, kidney failure, organ transplant, etc. Provides coverage for critical illnesses such as Alzheimer’s, disease, organ failure, paralysis, brain tumour, etc. These are some of the terminal illness examples.
Sum Assured The policyholder would get a lump-sum amount that is the sum assured as stated in the policy. The policyholder might receive up to 25% of the sum assured in terminal illness insurance to get the treatment for the disease. The remaining sum is paid to the nominee on the death of the policyholder.
Claim The policyholder can file a claim when diagnosed with any of the critical illnesses stated in the policy. The benefit amount can be claimed without the policyholder’s hospitalisation. The policyholder can file a claim when they are diagnosed with any of the terminal illnesses stated in the policy. The terminal insurance benefits will be provided if the life expectancy of the policyholder is less than twelve months.
Benefits With this insurance, you will be able to receive financial help when you require it. The claim sum that you receive can be used according to your needs. The nominee will receive the benefits after the death of the policyholder as financial help. In some cases, they might get up to 25% of the sum assured for treatment if the life expectancy is found to be less than twelve months. This is what terminal illness benefit means.
Taxes The total amount that you receive is not taxed. The claim amount is not taxed.

What is the Benefit of Critical Illness Cover?

The benefits of a critical illness cover are:

  • You will receive financial help when you require it for treatment and other things.

  • You can utilise the amount that you receive after the diagnosis not only for your treatment but for paying off the debts and compensating for the loss of income.

  • The lump-sum amount that you will get will not be taxable.

What is the Benefit of Terminal Illness Cover?

The benefits of a terminal illness insurance cover are:

  • The members of the family will not face financial issues after the demise of the policyholder.

  • The policyholder might be able to receive 25% of the sum assured to get treatment for the illness.

  • The family of the policyholder might be able to compensate for the loss of income that follows if one is diagnosed with a terminal illness.

Who Should Choose a Critical Illness Cover?

If you have a history in your family related to any of the critical illnesses, then choosing critical illness insurance would be an ideal option. Getting diagnosed with a critical illness can lead to financial instability, and critical illness insurance will provide you with a lump-sum amount to pay for your treatment and other expenses.

Who Should Choose a Terminal Illness Cover?

Now, that you know what the terminal illness benefit means, you can choose the cover if you are very concerned regarding the financial position of your family members after your demise. With a terminal illness, the chances of survival are almost negligible, and the cover might help your family become financially stable after your demise.


Now that you know what is a terminal illness, critical illness meaning, and their difference, you can choose a cover according to your needs. Both these covers provide long-term benefits at certain points of time in life. Therefore, your needs will help you determine the plan that will suit you. With the rise in medical expenses and the pandemic, having a health insurance plan with the right covers is essential. Also, ensure that you stay fit by exercising daily, eating healthy, and remaining stress-free by getting a health insurance policy.

Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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