Why do You Need a Separate Critical Illness Coverage?

The necessity of separate critical illness coverage alongside regular health insurance is often a subject of debate. So, if you, too, find yourself struggling to make a choice between regular coverage or health insurance with critical illness coverage, we’ve covered it all in this guide. Read on to learn about major illness insurance and how to pick between critical illness medical insurance and regular health insurance. But before start speechifying the necessity of separate critical illness coverage alongside regular health insurance, let us take a look at the two plan options individually.

Indemnity Health Insurance

A regular health insurance policy is basically an indemnity health insurance plan. Here, the insurer pays for the treatment expenses that are incurred. The coverage depends on the sum insured of your policy. For instance, you have a sum insured of ₹10 lakhs. After a 4-day hospitalisation for a covered illness, your hospital bill is ₹1.5 lakhs. Your health insurance provider will compensate the bill amount to you or the hospital authority. 

Critical Illness Health Insurance

A medical insurance critical illness cover is a fixed benefit plan. Simply put, you are eligible to receive a pre-determined sum if you are diagnosed with any illness from the given list of critical illnesses. As critical illness coverage is not indemnity-based, the actual bills are not relevant. So, for instance, Rohan Varma has a critical illness insurance cover of ₹10 lakhs. He is diagnosed with cancer, which is one of the listed illnesses. Once diagnosed, Rohan will receive the sum insured of ₹10 lakhs, which can be utilised any way he needs.

Let us now take a look at both these health insurance plans and compare their features:

1. The Coverage  they Offer

A regular health insurance plan is often chosen to get comprehensive coverage for in-hospital coverage, pre and post-hospitalisation, lab diagnostic charges, ambulance charges or an accidental injury. As discussed above, being an indemnity plan you get the coverage as per the policy that you have chosen.

In contrast, a critical illness insurance cover helps you manage the huge expenses that a critical illness can bring. If you are someone who is above 40 years old or have the threat of a critical illness due to genetic predisposition, it is recommended that you opt for a critical illness plan. Under this plan, you will be entitled to receive the lump sum amount if diagnosed with a critical illness listed in your coverage.

2. The Policy Tenure

A health insurance plan’s renewal policy can vary depending on the chosen policy and insurer. Policy tenure for regular health plans and critical illness is generally one year. But some policies are available for multi-years and are valid for 2 to 3 years as well. You should try to renew your health insurance plan before the tenure is over so that there is no break in the coverage. In case you fail to renew the policy, your policy will be considered expired.

3. Waiting Period

The waiting period is a very crucial aspect of every health insurance plan. In a regular health insurance plan, you have to wait for 30 days from policy purchase to make a claim. The waiting period for certain illnesses can go up to 4 years. Please note that accidental claims are typically covered from day 1.

In contrast to this, the critical illness health insurance waiting period can range between 30 to 90 days. This waiting period may differ from insurer to insurer.

4. Critical illness Comes with a Survival Period 

Survival period is not a part of the regular health insurance plan, but it applies to critical illness plans. The insured individual has to survive for at least 14 to 30 days after the diagnosis of the critical illness to avail of its lump sum insured benefits. Typically, survival time applies to people who are already suffering from any life-threatening critical illness.

5. Claim Settlement 

Under the traditional health insurance plan, you are eligible for a claim for the hospitalisation expenses, daycare expenses, diagnostic tests costs, ambulance charges, or AYUSH treatment costs etc., depending on the coverage you have opted for. However, the cashless or reimbursement claim settlement can’t exceed the limit of the sum insured.

On the other hand, the critical illness cover is not based on the incurred medical expenses. A lump sum amount is paid when a listed illness is diagnosed.

6. Coverage for other Family Members

If you opt for a regular health insurance plan, you usually get the option of including your parents, children, and spouse in the plan. In contrast to this, medical insurance critical illness cover only covers an individual.

7. The Cost of the Policy

A regular health insurance plan offers you indemnity coverage for various kinds of risks. Therefore, the premium amount might be higher than the critical illness health insurance plan. Also, as critical illness cover cost is only restricted to one person’s risk coverage for serious illness, the premium amount is typically lower.

>> Also Read: 5 Diseases causing Critical Illnesses

Why do You Need a Separate Critical Illness Cover?

A well-researched health insurance plan is a wise financial investment, offering security for your future. While most health plans will cover your hospitalisation costs due to a critical illness, what you need to keep in mind is that for such illnesses, the treatment can cost dearly. A modest health insurance plan might not be adequate to cover the costs. Also, there are many other financial implications if a family member is suffering from such an illness. High costs of medicines, regular check-ups, second opinions, travelling due to treatments and loss of income are some aspects that can significantly hit one’s finances.

With the best critical illness cover, you will not have to worry as it will provide a lump sum payout upon diagnosis, offering financial support beyond medical expenses. It will help you cover additional costs such as lifestyle changes, rehabilitation, or home modifications. Therefore, it is crucial to have critical illness insurance cover.  You need to keep in mind that medical insurance critical illness coverage cannot be a substitute for regular health insurance. Rather, it is a supplementary plan. So, you need to go with a health insurance plan that offers you a high sum insured or invest in a separate critical illness cover along with a regular health insurance plan.

Let’s Wrap it Up

By providing medical coverage during the times of crisis, our critical illness mediclaim  acts as a safety net. The policy covers 32 listed life-threatening ailments along with other benefits. Thus, this plan allows you and your family to focus on recovery without the financial strain. We reinforce the importance of having reliable health coverage in today's unpredictable circumstances.

Disclaimer: All plan features, benefits, coverage, and claims underwriting are subject to policy terms and conditions. Kindly refer to the brochure, sales prospectus, and policy documents carefully.