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What is the difference between health insurance and critical illness insurance
08 October 2020
Your life goals should not be deterred as a result of not having the right cover during a medical emergency. This can easily be prevented by learning about the subtle differences between various health insurance policies. Besides the different unique covers, there are significant differences between a comprehensive health insurance plan and a critical illness policy.
Here are a few essential differences between Health Insurance Plans & Critical Illness Insurance Policy
The general nature of a health insurance policy and critical illness insurance differ along the lines of what type of plans they are. Health insurance is a kind of indemnity insurance while critical illness plans are fixed benefit plans. In an indemnity plan, you pay for the actual amount incurred up to a maximum sum insured. You can reuse the policy provided your annual cover is not depleted. With a fixed benefit plan, you get the entire sum assured when you file a claim for the insurance.
A traditional health insurance plans will typically offer a range features like the AYUSH treatments, ambulance charges, restoration of the sum insured, domiciliary hospitalization, and even cover treatment after an accident. After completion of the waiting period, a traditional health insurance plan will also offer maternity benefits and start covering defined pre-existing ailments in sync with policy terms.
Critical illness insurance offers coverage against a defined set of critical illnesses – Max Bupa CritiCare covers 22 critical illnesses. The range of coverage offered depends upon the provider. Some of the critical illnesses covered include bone marrow/organ transplant, most cancers of particular severity, permanent paralysis of limbs, coma, heart ailments, muscular dystrophy, loss of hearing and/or speech, end-stage lung disease, major burns, multiple sclerosis, open heart placement surgery, and more.
The duration for which a health insurance plan and critical illness insurance policy last also varies. Normally, all health insurance plans need to be renewed year on year. Any variance to this procedure is revealed upfront by the seller.
In the case of a critical illness rider, the waiting period differs from insurer to insurer. Broadly speaking though, you are eligible to receive your Sum Insured from a critical illness policy after diagnosis of your illness.
With a traditional health insurance policy, expenses are typically covered in case your hospitalization exceeds 24 hours, and some plans also offer Day Care coverages which cover cost for procedures which don’t require hospitalisation like dialysis, radiotherapy and more. These expenses include medical bills and treatment costs which will be reimbursed by your policy after your treatment is completed. If you possess critical illness insurance, the sum insured will normally be paid to you as per the policy terms..
Since traditional health insurance is much more comprehensive, the premiums paid under it are relatively higher compared to a critical illness policy. You are getting indemnity coverage for all kinds of medical illnesses including their hospitalization charges, surgery, diagnostic tests, and other medical expenses. With critical illness insurance, you receive the sum assured if you are diagnosed with a critical illness covered under the policy. This makes the premiums much more pocket friendly when compared to classic health insurance. Based on personal preference, you can opt for the plan that is best suited to your needs.
In traditional health insurance, you get individual health insurance plans and family health plans. If you are an employer looking to cover all employees all at once, you can also opt for a group health policy. There are also senior citizen health policies that one can opt for if they are in a certain age group. In contrast to this, critical illness insurance can be purchased on an individual basis only. Senior citizens are normally not permitted to opt for such a plan.
When properly researched, health insurance can be one of the wisest ways to financially secure your future. Read more on tips for buying health insurance here.