The question of buying the right health insurance for oneself or a family member can really be a tricky affair. Should you take a regular health insurance policy or a critical illness health insurance plan or both? If you find the question of health insurance perplexing, you are not alone. Today’s post will give you a simple guide on what is health insurance and how it is different from critical illness health insurance so that you can make an informed choice correctly.
An Insight into health insurance
Health insurance, as the name suggests, gives you monetary assistance during sudden medical emergencies for you or a loved one. It is basically a contract with terms and conditions pertaining to the features of the coverage, the benefits you get and more. It is important for you to understand the contract document before you decide to purchase the policy. In case, you find the terms and conditions difficult to understand, consult an experienced insurance advisor for help.
Your regular health insurance is valid for a specific time period, in most cases, it is valid for one year. After this one year is over, the contract between you and the insurance company expires. You need to review your insurance policy to get stay covered again.
Shop and compare before purchase
You will be surprised to see a huge number of health insurance plans available in the Indian market today. There are plans for critical illness, individual health insurance, family floater plans and more. Refer to the link here to know more.
You might need to buy separate health insurance plans for yourself or your family. This is better illustrated by the following example-
Mr A lives with his spouse, children and aging parents. He needs to have the right insurance coverage to ensure he is financially backed-up in event of sudden medical emergencies. So, he might need to insure himself first with a health insurance policy as he is the sole breadwinner of the family, a critical illness health insurance plan for one or both of his parents and a family floater plan to insure his wife and kids. There are some insurance plans that offer maternity benefits as well.
An insight into critical illness cover
This insurance policy differs from the above as the policy holder must be diagnosed with a critical illness like cancer or others that fall into the category of “critical illness” that threatens the life of the individual. Such illnesses have very high medical costs and bills. One cannot rely on a regular health insurance plan to cover them as the coverage is not enough to cover the costs of frequent hospitalization, multiple visits to the doctor and continuous tests as well as health screenings. In such circumstances, it is prudent to have a lump sum of funds to cater to the above expenses.
Let us understand the above insurance plan with the help of an example below-
Mr B has been diagnosed with cancer and he needs to undergo several treatments like surgery, radiation therapy and medications. The total cost of his treatment comes to around 6.5 lakhs. In the past, he has bought a critical illness insurance cover for himself and the expenses for his treatment was covered by this plan. His plan has an assured sum of 6 lakhs. This means that most of his medical costs for the treatment of cancer is covered by this critical illness health insurance cover and he just needs to pay Rs 50,000 from his own pocket.
Parameters |
Health Insurance Plan |
Critical Illness Cover |
| Extent of coverage | You get a coverage for many health conditions like accidents, diseases, some pre-existing diseases and others. Some offer maternity coverage as well. | You will be limited to only those health diseases and conditions that fall under critical illness only. |
| Plan Benefits | Options like cashless treatments, extra coverage for family members and other health insurance benefits are covered too. | There is just one payment given to the policy holder in the event of the specific critical illness. He/she can use this assured sum as deemed fit
. |
| Insurance Premium | The health insurance company will determine the premium based on factors like the coverage, number of members insured, assured sum etc. | The premium here depends upon the insurance company, the diseases covered and the assured sum of the policy. |
| Insured sum | You get an assured sum that ranges from five to ten lakhs | The sum here ranges from five to fifty lakhs |
| Insurance Policy Waiting period | The waiting period for any pre-existing health disease or maternity benefit ranges from one to four years from the date your insurance policy commences. | The waiting period for any critical illness policy is generally about 90 days from the date your insurance policy starts. |
| Policy Survival period | NA | This refers to the time period that the holder of the policy must survive post the date of the diagnosis. It ranges from fourteen to thirty days as per your insurance policy |
| Status of the insurance plan | Stays valid till the sum insured gets exhausted or till the expiry date | Valid till the policy claim is made or until the date of policy expiry |
Buying health insurance or critical illness insurance actually depends upon the medical condition of the policyholder. Since medical emergencies are unpredictable, one should ensure they have a health insurance portfolio that is potent enough to offer them financial backup when a medical emergency suddenly surfaces out of the blue!
