Things to keep in mind while adding a critical illness plan

I have health insurance coverage of ₹5 lakh but want to make my policy more comprehensive. I would like to add a critical illness plan to my protection portfolio. How do I go about with this?

—Name withheld on request

Critical illness plans are fixed benefit plans that provide coverage for a specific list of Illnesses (ranging from 6 to 50 types of illnesses, as specified by the insurer). If the policyholder is diagnosed with one of these illnesses, 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, live disorders, stroke, etc.

I recommend supplementing your health insurance with a critical illness plan for three reasons. Firstly, health insurance plans primarily cover hospitalization costs. However, in case of a critical illness, several medical and non-medical expenses are incurred to cater to the patient’s altered lifestyle. A lump sum amount can help offset these expenses. Secondly, if diagnosed with a critical illness, one may consider seeking a second opinion from renowned hospitals or undergo experimental treatment in India or abroad. This entails substantial expenses, including travel expenses, which are not covered by standard health insurance policies. Finally, a critical illness can impair an individual’s earning capacity. In the short term, the person may need to take extended unpaid leave. In the medium term, the person may need to work with reduced capacity. 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 the same. What are the must-have add-ons I should look at apart from buying a regular motor policy?

—Name withheld on request

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

Second, is the engine protection cover. In the case of driving a car on a water-logged road, the ingress of water in the engine can damage it. The standard policy does not cover this, so considering the engine is expensive to replace, this add-on must be opted for.

Third, the important add-on is the return to invoice (RTI). Each year, the insured declared value (IDV) of the car decreases. In case of a total loss, only the IDV is payable to the policyholder. However, this IDV amount may not be sufficient to cover the cost of buying a new car, which is why the RTI add-on is important. In case of total loss, the insurer will then pay the original invoice value of the car.

Abhishek Bondia is principal officer and managing director, SecureNow.in.