Health Insurance Plan Vs Critical Illness Cover

Ailments and expenses covered:

A traditional health insurance plan primarily covers hospitalization costs. On the other hand, in critical illness, you get a lump sum in case you are diagnosed with a critical illness, which is covered by the policy.

However, hospitalization accounts for only 35% of the expense. With a critical illness cover, you can cover other costs, including pathology tests, therapy, post-surgery care, and so on. The primary purpose of taking out a critical illness plan is not only to cover the high, essential costs of illness but also to provide financial security and compensate for the economic loss incurred due to critical illness.

A critical illness cover typically covers Non-Communicable Diseases, including heart attack and cancer. Bajaj Life Insurance Health Care Goal provides comprehensive cover for up to 36 critical illnesses.

 

Benefit Model:

A regular health insurance plan is an indemnity plan that covers the actual expenses incurred. You will need to submit bills and your medical records to get the benefit. However, in Critical Illness, the lump-sum amount is received regardless of the actual cost incurred and can help supplement the financial burden.

 

Policy period:

The policy period is a key distinction in the comparison of critical illness cover vs health insurance. Standard health insurance plans are annual contracts requiring yearly renewal. Most health insurance plans need to be renewed every year, though some offer multi-year coverage.

Waiting Period:For critical illness cover, there is a waiting period after which the sum insured  can be claimed upon diagnosis of the illness. However, for a health plan, the waiting period is generally 30 to 90 days and does not apply to an accident.

 

Survival Period:

In case of critical illness cover, the insurer must survive for at least 30 days after the diagnosis of the ailment to receive the benefits. On the other hand, an ordinary health insurance plan does not have a survival period clause.

 

Policy Expiry:

A critical illness plan ceases to be active once the insured is diagnosed with a critical illness and the sum insured is paid to the insurer, irrespective of the actual expenditure. However, a health insurance plan remains effective until the end of the policy term and can be renewed at that time.

 

Key Takeaways

1. Health insurance reimburses hospitalization expenses, including surgeries, diagnostics, and post-hospital care.
2. A critical illness rider pays a lump sum on diagnosis of severe illnesses* like cancer, heart attack, or stroke, and covers therapy, long-term care, and income loss.

*Often, the insurance companies provide a list of diseases covered under riders.

Although both health insurance and critical illness cover provide financial support during medical events, they serve different purposes- health insurance helps pay for treatment expenses, while critical illness cover offers a lump-sum payout on diagnosis. Evaluating these differences alongside your needs can help you make an informed decision.

 

Conclusion

Understanding critical illness cover and health insurance is essential to get comprehensive financial protection. While health insurance primarily handles hospitalization costs, a critical illness rider provides a lump sum for severe illnesses, covering treatment, therapy, and income loss. At the same time, it is essential to note that you cannot buy a critical illness rider alone. It is an add-on that you can buy along with your basic insurance plan.

 

FAQs

 

1. Does health insurance cover critical illnesses?

Health insurance covers the hospitalization expenses for critical illnesses, including treatment costs, pre- and post-hospitalization expenses, diagnostic tests, and other medical bills. However, it does not provide a lump sum payment upon diagnosis.

 

2. What is considered a critical illness under a critical illness cover?

Critical illness rider can include life-threatening conditions such as heart attack, cancer, stroke, kidney failure, major organ transplant, paralysis, and other severe NCDs.

 

3. What is the waiting period under a critical illness cover?

The waiting period is the minimum time from policy inception to eligibility to claim benefits, usually ranging from 30 to 90 days, depending on the insurer and the specific illness.

 

4. Who should consider buying critical illness cover ?

Individuals with a family history of chronic or life-threatening diseases, high financial responsibilities, insufficient savings for treatment, or needing financial security during prolonged medical recovery should consider critical illness cover .