Having a life and health insurance may not be enough

This headline can reduce even the most money-savvy people into a heap of emotional mess. By taking out health and life insurance, they had all their bases covered - or so they thought. Unfortunately, though, there's a tiny yet critical gap between a life and health policy. Here's how: a health plan only compensates for the medical treatment cost, while a life insurance policy only gets activated after the demise of the policyholder. But what happens if the breadwinner is diagnosed with a serious illness (cancer, heart ailment, stroke and what-have-you) or suffers from a disability (visual or physical impairment) that renders them incapable of working? What if the family needs an additional income over and above the hospitalisation and treatment costs? None of the above-mentioned insurances would come to your rescue. This is where critical illness and disability insurance step in. These two insurances can bridge the gap between health and life insurance. Given their importance, let's do a deep dive to understand them better. Critical illness plan A critical illness plan typically covers between eight and 64 illnesses. If you are diagnosed with any of the listed illnesses, you and your family can receive the lumpsum amount assured while signing the policy. The payout can be a godsend, especially if you fall seriously ill, which

This article was originally published on May 15, 2024.