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COVERAGE for critical illnesses is increasingly getting attention from individuals. A plain vanilla health insurance helps in most medical emergencies and treatments, but individuals have been exploring additional covers such as the critical illness cover. This cover is made available by life as well as general insurance companies. Standalone critical illness policies are offered by general insurance companies and critical illness riders to a pure protection term insurance policy are offered by life insurance companies.

Once the policyholder has been diagnosed with a critical illness, standalone critical illness policies, as well as critical illness riders, pay the entire sum insured in the rider or the policy to the policyholder.

On payout, a standalone policy lapses. So does the rider in the life insurance policy. Although, the life cover in the base policy continues till maturity.

A standalone critical illness policy from non-life insurer is an annual contract and may be bought any time. In case of life insurance riders, the underwriting of risk is done at the time of policy sale. The policyholder may exit from the critical illness rider at any policy renewal, but he would not be able to enroll for the rider during policy tenure.

Standalone policies have an initial waiting period of 90 days, during which, the policyholder is not covered against any critical illness, while it is 120 days in case of life insurance riders. Further, in case of standalone policies, the policyholder must survive for 30 days after the diagnosis of critical illness, whereas, there is no such restriction in case of the life insurance riders. The documents that are required to file a claim under both options are similar. The insurers ask for doctor's certificate, diagnosis report or test reports.

For a 30-year-old individual, a standalone critical illness policy will cost around Rs 2,809, Rs 3,075 and Rs 3,371 from HDFC Ergo General Insurance, Reliance General Insurance and Bajaj Allianz General Insurance, respectively. The premiums go up to Rs 8,427, Rs 8,674 and Rs 8,989 once the policyholder turns 45 years old.

On the other hand, critical illness rider will cost him Rs 5,500 from Kotak Mahindra Old Mutual Life Insurance for a 30-year term. The critical illness rider premiums are fixed upfront, and the policyholder has to pay the same premium throughout the policy tenure. This premium will, however, be in addition to Rs 8,287 charged for term insurance. The benefit of coverage of critical illness lapses when the term policy expires, while in standalone critical illness policies, you can keep renewing it lifelong or till the maximum age specified by the insurer The list of diseases that are being covered by life insurance riders and general insurance critical illness plans are similar. These include heart attack, stroke, bypass surgery, cancer, kidney failure, paralysis, loss of limbs, major burns and blindness. 

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