Health Insurance

Critical Illness Insurance Versus Comprehensive Health Insurance

Ravi is a 38 year old stenographer working at a private firm in Bangalore, earning a reasonable salary. He was provided a comprehensive health insurance cover by his firm. He is intelligent and has planned out his expenditure well, but put off getting a critical illness insurance as he already had a health cover provided by his company. One day, he suffers a massive heart attack and is hospitalised in a critical care unit for a week. His health insurance covered hospitalised treatment up to only 2 lakhs and he has to pay for all additional expenses incurred during this period. He also lost precious working days for which his salary is deducted. He is left in the lurch and struggling to make both ends meet.

If Ravi had purchased the critical illness rider or a separate critical illness insurance plan, he would have received a lump-sum of money to tide over this unforeseen financial burden. Thus we see that there is an urgent need to understand the basic difference between critical illness insurance and comprehensive health insurance.

Importance of Health Insurance

Healthcare systems in developed countries like the US have proven that health insurance is the backbone of any efficient healthcare system. India is no exception to this rule, except that the concept of health insurance is taking shape only recently in our part of the globe. Health Insurance is a necessity and not an extravaganza. It is often that people like Ravi regret their financial loss due to unexpected illness and hospitalisation.

Before you purchase any health insurance policy, be sure to understand the difference between Critical Illness Insurance and Comprehensive Health Insurance. Health insurance can be of various types including mediclaim or general health plans, critical illness plans, hospitalisation cash benefit, etc.

Now, let us take a closer look at the key differences between critical illness insurance and comprehensive health insurance:

  1. Basic features: A comprehensive health insurance policy is a reimbursement of actual medical expenses on admission due to any illness with exceptions detailed in the policy terms. It is an indemnity policy and can be availed every time the insured person falls ill after a waiting period. Some health policies also cover out-patient treatment. In comparison, critical illness insurance is a benefit policy wherein the insurance company will pay the policyholder a one-time, lump-sum amount on diagnosis of covered critical illness to subvert the financial loss incurred, as agreed upon in the policy document. It only requires a diagnosis of critical illness and not hospitalisation.
  2. Coverage: A comprehensive health insurance covers the whole gamut of illnesses, with the exception of pre-existing diseases, dental treatment, maternity and pregnancy cover, etc. On the other hand, a critical illness insurance covers only a handful of critical illnesses like cancer, stroke, kidney failure, heart attack, major organ transplant, multiple sclerosis, and paralysis and the number of diseases covered varies from insurer to insurer.
  3. Nature of Insurance: While premium for most health insurance plans is a yearly affair, it provides coverage for as long as the policy is active. However, single premium for critical illness insurance is paid for a coverage of 10–20 years.
  4. Waiting Period: Most health insurance policies have a defined waiting period and exclude pre-existing diseases. Waiting period for most general health insurance plans is one month for most ailments but the waiting period may be longer, even upto 2 years for diseases like hernia, piles, sinusitis, diabetes, and cataract. Waiting period for critical illness insurance plans is usually around 90 days.
  5. Minimum Period for Making a Claim: While most general health insurance plans require a minimum stay of 24 hours in the hospital to make a claim, critical illness insurance requires the insured person to survive at least 30 successive days after the diagnosis of the critical illness, with or without hospitalisation. Simply put, if the insured person dies within 30 days of diagnosis of a critical illness, his/her claim is summarily rejected.
  6. Policy Status after Making a Claim: While policy status remains active for successive illnesses with a general health insurance until the coverage amount/sum assured is exhausted, a critical illness insurance lapses immediately once a claim is made for any of the covered critical illnesses.
  7. Sum Assured: Most insurers provide general health insurance cover with a ceiling of about Rs. 5 Lakhs to Rs. 10 Lakhs. Critical illness insurance provides a higher coverage ranging from Rs. 5 Lakhs upto Rs. 50 Lakhs.

Final Words of Advice

Always remember that health is never a surety and hence, comprehensive health insurance, including critical illness insurance are essential for achieving financial stability. It is also important to understand the difference between general health insurance and critical care insurance and decide on which to purchase based on your healthcare needs.

It is always wise to have a comprehensive health insurance cover to meet your regular medical expenses, while having a critical illness insurance cover to protect your finances from any major critical illness.

Royal Sundaram Health Insurance offers you a healthy combination of a comprehensive health insurance plans that are affordable and provide a wide range of benefits to take care of you and your family.

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• Meet the Author • Dr. Lawrence Kindo

I am a Medical Professional with a passion for writing, blogging, playing, computers, and of course patient care. My writing in this medical blog will reflect my passion, and you are welcome to be a part of this venture. This medical blog is a tribute to all the great medical pioneers, and to the ultimate source of wisdom, God.

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