FAQ - Critical Illness

Q.
What is the difference between a Critical Illness & Health Insurance Policy?
Ans

There are different kinds of Insurance Plans available in the market. The basic types are Mediclaim/ Health Insurance, Critical Illness, Personal Accident Policy, Hospital Cash Benefit, Senior Citizen Health Insurance, etc. A lot of people often get confused between a Health Insurance Plan & Critical Illness Policy. 

Let us understand the basic difference between a Critical Illness Policy and a Health Insurance Policy:

Parameter

Critical Illness

Health Insurance

Definition

Critical Illness Policy is a Defined Benefit Plan i.e. it pays a lump sum on diagnosis of any pre-specified Life-Threatening diseases like Cancer, First Heart Attack, Multiple Sclerosis, etc.

Health Insurance Policy is an indemnity policy that covers hospitalization expenses in case the insured suffers from Illness/ Diseases or Accident. It reimburses your actual medical expenses. 

Purpose

The purpose of buying a Critical Illness Plan is not only to foot the high medical bills but also to compensate any financial loss that arises due to serious or Life-threatening illness.

Health Insurance Policies are required to defray the hospitalization expenses incurred by the insured on the medical treatment.

Coverage/ Scope

Cover for specific Listed Critical Illnesses only - such as Cancer, First Heart Attack, Kidney Failure, Stroke, etc. (Max up to 37 Critical Illness - Please refer the list)

Covers the hospitalization & Day Care treatment for diseases/ illnesses/ Injuries; as long as within the purview of the policy. It covers the entire gamut of Diseases/Ailments except Pre-existing diseases & certain ailments which have a waiting period.

Waiting Period

There is a waiting period of 30/60/90 days before the insured can claim for the listed Critical Illness.

There is a waiting period of 30 Days for Illness/ Diseases except in the event of an accident, it is covered from day one.

Survival Period

The Insured needs to survive for a period of 30 days from the date of diagnosis of first illness for the claim to be paid.

There is no Survival Period for the benefits to be paid.

Sum Insured

A Critical Illness Policy offers a higher coverage between 5Lacs to 1Cr

Under a Health Insurance Plan the Insured get the option to choose the Sum Insured between 2Lac to 60Lacs.

Policy Status

Normally, most of the Critical Illness Policy will expire once the claim is paid. However, there are certain policies which continue with the other listed Critical Illnesses

A Health Insurance Policy still continues even after a claim is paid. It will remain in force until the time, either the Sum Insured is exhausted or the policy completes a year.

 

Though both the policies supplement each other, we should also remember that they serve a different purpose and, therefore, every individual requires both these policies. Let's understand with an example:

Mr. Sharma has been diagnosed with Cancer. He has a Health Insurance Policy of 5Lacs. His basic health insurance policy will take care of hospitalization expenses & medical bills, but what if Mr. Sharma needs to stay at home for post-recovery treatment? Here, a critical illness plan would be the answer. It will take care of Mr. Sharma's post-operation treatment, handle his personal expenses (Like - Maid expenses, Children school fees, Household expenses, etc.) at the time of recovery. 

A critical illness policy will pay a Lump Sum Benefit irrespective whether you're hospitalized or not and whether you incur any expenses for the medical treatment. 

We hope that all your concerns are clarified. There are a lot of different critical illness plan available. If you would like to compare and understand which plans suits your needs please click - Critical Illness Plan.

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