Critical Illness Insurance Vs Health Insurance?
Learn the difference between health insurance and critical illness insurance.
What is the difference between Critical illness insurance and Health insurance?
You might think that you only need health insurance to protect you against all illness and injury. The truth is, however, that having one health insurance plan to match all of your medical requirements is not a good idea. Ideally, you also need to have a plan to cover life-threatening illnesses since the regular health insurance plan will not protect you against major ailments. In other words, your regular health insurance plan will not cover the treatment cost if you are diagnosed with a critical illness!
Regular health insurance plans are usually indemnity-based plans, meaning you have to claim every hospitalisation or treatment to get the benefit. On the other hand, critical illness insurance provides you with a lump sum benefit in one go. It helps pay all your expenses to deal with a critical illness.
Below, we’re going to discuss the difference between both insurance in more detail.
Key Points
- Health insurance and critical illness insurance have different purposes.
- Health insurance doesn’t usually cover severe illnesses.
- Choosing both insurances will significantly increase your health care coverage and provide you with a more stable future.
Coverage
Health insurance offers coverage for a wide variety of situations, such as accidents, diseases, pre-existing diseases, etc. The plan coverage typically includes hospitalisation costs, pre- and post-hospitalisation expenses, domiciliary treatment, and daycare procedures. It may also cover maternity-related costs, depending on the specific plan you have.
Critical Illness Insurance, designed for specific ailments, provides a safety net. Diagnosing a listed critical illness, such as a heart attack, stroke, certain cancers, multiple sclerosis, or organ transplant, instigates a lump sum payment in your favour. If you’re tragically diagnosed with a specific type of cancer specified in your policy, the insurer pays out a significant amount.
On the contrary, critical illness insurance covers you for a limited number of serious diseases. These severe diseases are typically not covered by your regular health insurance plans as their treatment costs can be hefty. The number of illnesses covered by critical illness insurance depends upon the specific insurance company. In general, the covered critical illnesses are:
- Stroke
- Heart attack
- Cancer
- Kidney failure
- Multiple sclerosis.
With critical illness insurance, you are given funds that you can use for travel, hospitalisation, loss of income, postoperative care, or even for costs incurred due to a change in lifestyle following the digital illness diagnosis.
Benefit
Health insurance offers multiple benefits for you. Some of the benefits you can enjoy by having a health insurance plan are as follows:
- Cashless treatments
- Coverage for multiple family members
- Additional coverage options.
Regular health insurance plans pay for the costs of your treatment and hospitalisation.
Consider the varied coverage offered under critical illness insurance. Serious health conditions such as cancer, heart attacks, and strokes typically fall under the covered diseases, offering relief when it’s needed most. Some policies cater to less severe illnesses or even critical conditions diagnosed in children.
Critical illness insurance provides you with a lump sum payout when diagnosed with a specified critical illness. You can use the money for anything you want, not restricted to the medical treatment of your illness. For instance, you can use it to pay for your family’s daily expenses or cover your loss of income when you can’t work due to illness.
Critical illness insurance provides you with a lump sum payout when diagnosed with a specified critical illness. You can use the money for anything you want, not restricted to the medical treatment of your illness.
Waiting Period
A waiting period is the amount of time you will have to wait for, from the beginning of your policy, to be able to get the benefits. With health insurance, the waiting period is usually for pre-existing and maternity benefits, ranging from 1 to 4 years from the start date of the policy.
The waiting period for a critical illness policy varies from one insurer to another. Typically the waiting period is 90 days from the start date.
Premium
The premium for health insurance depends upon the insurance company, coverage offered, members covered, as well as the amount of sum insured in the policy. Also, health insurance premium usually increases with age.
The premium for critical illness insurance also depends on the insurance company. It can also vary depending on the number of diseases covered and the sum assured of the policy. In most cases, the premium remains the same throughout your lifetime, meaning you will pay the same premium until the validity of the insurance ends.
In most cases, having both health insurance and critical illness insurance is essential.
Validity
Health insurance is typically valid until the sum insured gets exhausted or until the date of expiry. On the other hand, critical illness insurance is only valid until a claim is made or until the date of expiry.
Claim Process
The claim process of health insurance and critical illness insurance is different.
Health Insurance
A health insurance policy can typically be claimed in two ways: you can either file a reimbursement claim or a cashless claim.
- A reimbursement claim can be made after you make the payment of your hospital bills. You must submit the bills and receipts to your insurer for approval. You also have to submit a duly filled claim form.
- A cashless claim is an option if you get treatment in a network hospital (the hospital that the insurance company is affiliated with).
If your insurer approves the claim, you will receive payment of the claim amount.
Critical Illness Insurance
With critical illness insurance, you can only file a claim if you are diagnosed with any of the listed illnesses. Make sure to get in touch with your insurer after the end of the survival period.
All you have to do is submit the duly filled claim form along with the other required documents. Then, the insurance company will verify the documents. If your claim is approved, you will receive a lump sum amount, which can be used to avail treatment or for anything you want.
Which Insurance Is Better Critical Illness Insurance or Health Insurance?
Ultimately There is no “better” insurance between the two. Buying health insurance and critical illness insurance largely depends on your medical state.
A medical emergency is unpredictable and can happen anytime. Therefore, you need to have strong health protection to back you up financially in case of a medical emergency.
Both critical illness insurance and health insurance provide sufficient coverage for different situations. It is better to have both as regular health insurance will cover you for medical emergencies, it won’t cover you for serious illnesses since these plans aren’t that huge with sum insured. Also, they function on an indemnity basis, meaning they usually only help you when you are hospitalised. On the other hand, critical illness insurance can give you a large lump sum, which will help you financially when you’re diagnosed with a serious illness.