Terminal Illness vs Critical 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, with almost no chance of survival. Terminal illness examples include Alzheimer’s disease, organ failure, paralysis, etc.

Critical illnesses are those types of illnesses that are serious 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.

Also Read: Critical Illness Insurance

Terminal illness insurance is a type of health insurance plan that provides coverage against fatal medical conditions expected to lead to death within a short period.

This type of insurance typically offers a lump sum payout to the insured or their beneficiaries upon diagnosis of a terminal illness, helping to cover medical costs and end-of-life expenses and providing financial support during a difficult time.

Example of Terminal Illness Insurance

Aditya has purchased terminal illness coverage with a sum insured of 5 lakh. He was diagnosed with a brain tumour with a life expectancy of less than 12 months. Aditya has undergone medical treatments as well.

To cover the treatment cost, Aditya has decided to claim terminal illness coverage. The insurance company pays 25% of the sum insured and the remaining will be paid to the nominee after the policyholder has died.

Critical illness insurance is a type of health insurance that provides coverage against severe medical conditions that pose a significant risk to life, such as heart attack, stroke, kidney failure,
cancer and organ transplants.

It offers a lump sum payout upon the diagnosis of a covered critical illness, which can help with medical expenses, treatment costs and other financial needs during recovery.

Example of Critical Illness Insurance

Arjun purchased critical illness insurance with a sum insured of 10 lakhs. Later in life, he was diagnosed with kidney failure. The treatment for kidney failure is expensive, as patients need to undergo kidney transplants and dialysis.

Upon his diagnosis, Arjun filed a claim for critical illness coverage. The insurance company settled the claim by paying a sum insured amount as a one-time benefit, irrespective of Arjun’s life expectancy.

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

Medical conditions, whether critical or terminal, can disrupt an individual's financial situation. Hence, it is crucial to safeguard health by buying a health policy with critical illness coverage or terminal illness coverage. Here are some of the benefits of purchasing a plan.

Benefits of Terminal Illness Insurance

• One of the benefits of terminal insurance coverage is that policyholders' family members will not face financial issues after their death.
• With terminal insurance coverage, policyholders can avail 25% of the sum insured for their treatment while they are dealing with illness.
• The terminal illness coverage also offers financial assistance to policyholders' families in case of income loss after diagnosis.

Benefits of Critical Illness Insurance

• One of the benefits of purchasing a health insurance plan with critical illness coverage is the financial assistance it provides for treating critical illnesses.
• Another crucial benefit of critical illness insurance is that it compensates for the loss of income.
• The premium payment towards critical illness insurance may be eligible for income tax deductions u/s 80D of the IT in India, adding financial advantage.

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.

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.

Understanding the difference between terminal illness vs critical illness is crucial when selecting the right health insurance plan. While terminal illness refers to conditions with a limited life expectancy and focuses on end-of-life care, critical illness covers serious but treatable conditions that may require extensive treatment.

By recognising these differences, individuals can make informed decisions about the type of coverage they need, ensuring they are adequately protected against life-threatening health conditions and have the financial support required during recovery or in end-of-life situations.

TATA AIG offers health insurance plans that are customised to your unique health needs. For instance, our health insurance for parents has comprehensive medical coverage, including treatment for hospitalisation, surgeries and critical illnesses. It ensures that your parents are financially protected in case of unexpected medical emergencies.

Furthermore, we offer enhanced coverage with various other benefits, such as a cashless treatment facility, tax benefits and more. Secure yourself and your parents with our health insurance plan now.