Tax Planning

How Do You Protect Your Wealth In Times Of Critical Illness

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One of your friends has met with a cardiac arrest. The doctors have suggested doing a procedure called CABG(Coronary Artery Bypass Grafting) to remove the blockage in the arteries leading to the heart. Also, they have advised him to take time off from work for at least a period of 6 months after the procedure. He has a medical insurance plan that will only take care of his hospitalization expenses. But it won’t take care of his home loan EMI’s and living expenses. His employer also, is not ready to give a paid leave of 6 months. How  does he take care of his family for the period that he will be at home, recovering from the injury?

A normal scenario

This is a normal scenario that is played out across a lot of households. The severity and type of critical illness may differ, but the result is the same; depletion of savings. Irrespective of whether the individual concerned is suffering from a kidney disease, stroke, wants to get an organ transplant done or is wanting to have a tumour in the brain removed, the affected individual may have to take some time off from work that will affect his income generation ability.

What do you do when a critical illness strikes?

Most people either depend on friends or relatives for financial support. A few have some savings with them in the form of liquid cash,F/D’s or gold which they liquidate and manage the condition. But there are precious few who actually do the right thing by going for a critical illness insurance plan. Let’s understand what a critical illness plan is and how it is different from a medical insurance plan.

A critical illness plan

In the event of you being diagnosed with a critical illness, the insurance company will make a payout of the sum assured. So, for instance , if you have a critical illness plan with a sum assured of Rs.25 lakhs, you can submit a claim to the insurance company on the diagnosis of the same. This sum may help you to pay your home loan EMI’s and allow you to maintain the same lifestyle that you were enjoying if you’d have received a regular monthly salary. The best part of this plan is that the claim is submitted just on the basis of a simple diagnosis report of the hospital or doctor. The life assured can utilize the said sum in whichever way he deems fit. There are a lot of illnesses that are covered in these plans from first heart attack and stroke to partial blindness and kidney damage requiring dialysis. 

Use your savings for what they are intended

If you don’t have a critical illness cover, your savings will get depleted as you will be utilizing that for meeting your day-to-day expenses when dealing with the critical illness. These savings may be meant for your daughter’s marriage or her education. This will upset your plans and may disrupt your life badly. If for instance, your daughter’s marriage is due in the next 6 months and the money that you set aside for the same gets used up during the period you recover from the critical illness.You may have to look at taking an expensive short-term or intermediate-term loan to meet the expenses of the marriage which may disturb your financial plans.


If you don’t want your savings to get depleted because of a critical illness, buy a critical illness plan like Edelweiss Tokio Life – CritiCare+ and shield your savings from depletion.

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