Terminal Illness and Critical Illness Insurance

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What is a Terminal Illness?

Terminal illness refers to any disease or illness that cannot be cured. The health condition of a person suffering from a terminal illness is very serious, and it will most likely lead to his or her death. It is also called a life-limiting illness, as the chances of the patient’s survival are minimal.

A terminal illness insurance policy is very helpful for such patients and their family members. The policyholders can claim up to 25% of the sum assured for their treatments (if their life expectancy is less than 12 months). The balance amount is paid as death benefits to their nominees.
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Examples of Terminal Illnesses

There is no definite list of terminal illnesses. The patients may have one or more serious health conditions that can turn out to be life-threatening. But some diseases that can be termed ‘terminal’ are listed below.

Advanced Cancer

Advanced Heart Diseases

Multiple Organ Failure

Lung Diseases

Neurological Diseases (like Parkinson’s)


Motor Neuron Disease (MND)

Dementia (including Alzheimer’s Disease)

Brain Tumor

Liver Failure

End-stage Senescence

How Do I Know If My Illness is Terminal?

People suffering from terminal illnesses can experience drastic changes in body weight due to reduced appetite and difficulty in eating food. Fluid retention can lead to swelling in the hands and legs. Some people also experience chronic pain and may have severe difficulty breathing as the disease advances.
Please contact your physician or any doctor who is managing your health condition. After studying your medical history and conducting suitable diagnostic procedures, a qualified medical professional can confirm whether the illness is terminal or not.

Who Should Opt for Terminal Illness Cover?

A terminal illness can cause mental distress and financial hardships to the patient’s family. The treatment can be prohibitively expensive and may result in loss of income if the family’s main breadwinner is the patient. The illness can progress rapidly without any cure and ultimately lead to the person’s death.
People who buy a term insurance policy can opt for terminal illness coverage at nominal rates. The policyholder can claim 25% of the sum assured for medical treatment. The nominees are eligible to claim the death benefits of the said policy. It safeguards the policyholder’s family by offering financial support during treatment and after an unfortunate demise.

What is a Critical Illness?

A critical illness refers to any disease that is serious but can be cured through appropriate medical intervention.
A regular health insurance plan pays for medical expenses only if the insured members are hospitalized. The compensation paid by the insurance company does not exceed the hospital bill amount.
But critical illness insurance pays a lump sum amount to the policyholder as soon as the disease is diagnosed. You need not wait until hospitalization. The entire sum insured is paid as a one-time benefit to policyholders, who are free to use the money as they wish.

Examples of Critical Illnesses

Some common examples of critical illnesses are given below.

Benign Brain Tumor

Cancer (excluding less advanced cases)

Cardiac Arrest

Heart Attack (with specified severity)

Kidney Failure (requiring permanent dialysis)

Respiratory Failure

Traumatic Brain Injury

Liver Disease (advanced stage)

Loss of Limbs

Multiple Sclerosis

Organ Transplantation (external donor)


Third Degree Burns

Which Critical Illnesses Are Covered Under Critical Illness Cover?

A critical illness cover provides a lump sum benefit for the treatment of specified diseases. This amount can also be used to replace the loss of income to the family.
A typical critical illness insurance policy covers most of the common diseases listed above. The list may vary slightly across insurers. Please check and confirm the same before you buy the policy.

Who Should Opt for a Critical Illness Cover?

Every person can benefit from a critical illness insurance policy in current times. The modern age is replete with stress, a sedentary lifestyle, and unhealthy food habits. Diseases such as diabetes, heart attack, cancer, stroke, kidney failure, etc, have seen a massive surge in recent times.

The expensive medical treatment costs and loss of income due to illness result in a double whammy for most families. The following people can specifically benefit from buying a critical illness cover.

Those with a family history of critical illnesses carry a high hereditary risk of developing the same.

The primary breadwinner of a family carries huge responsibilities. The entire family can plunge into poverty if something untoward happens to such persons.

People who work in high-pressure jobs and unpleasant or tough conditions.

Any person above the age of 40-45 is vulnerable to critical illnesses.

Benefits of Terminal Illness Cover

Some of the major benefits of terminal illness insurance are as follows:

A policyholder can claim up to 25% of the sum insured toward medical treatment expenses.

The insured can protect their families from financial hardships after their demise.

The family gets financial assistance if the primary breadwinner is unable to work due to a terminal illness.

Benefits of Critical Illness Cover

The primary advantages of critical illness insurance are listed below.

The policy covers over 30 critical illnesses that are serious and life-threatening.

Hospitalization is not necessary to claim the policy benefits. The insured gets a lump sum payment immediately after the disease has been diagnosed.

The insurance cover provides flexibility to the policyholders to utilize the money according to their requirements. It can be used for medical treatment, to replace the loss of income, and for other living expenses.

Difference between Terminal Illness and Critical Illness Insurance

The policy covers over 30 critical illnesses that are serious and life-threatening.

Terminal Illness Insurance

Critical Illness Insurance


Covers terminal illnesses with no cure that eventually result in death.


Covers serious diseases that can be cured with proper medical care

Claim Availability for the Insured

Up to 25% of the sum assured can be claimed by the policyholder for medical treatment.

Claim Availability for the Insured

The policyholder receives a lump sum amount equal to the sum insured after the disease is diagnosed.


The family members receive the money after the death of the policyholder.


The policyholder gets the money for medical treatment and other expenses.

FAQ's on Terminal Illness and Critical Illness Insurance

Advanced cancer is a bit different from terminal cancer. Though both are not curable, it is possible to slow the progression of advanced cancer through targeted treatment. But terminal cancer does not respond to any treatment.

No. A terminal illness specifically refers to any disease that is incurable and eventually results in the patient’s death.

Yes. If the life expectancy of the insured is less than 12 months, the insurance company will pay up to 25% of the sum insured toward medical treatment.

Hospitalization is necessary under a regular health insurance plan. The actual bill amount is reimbursed to the policyholder. But critical illness insurance does not require any hospitalization. A fixed sum is paid to the insured immediately after the disease is diagnosed.

Disclaimer: The health insurance policy or plan may have limitations, exclusions, and other terms and conditions that may affect coverage. It is important to carefully review the policy wording before making any decision.