Medical emergencies can lead to unexpected financial burdens, even with health insurance. Although health insurance is necessary, it may not always cover all financial risks associated with a serious illness.
Many people believe that health insurance is sufficient, but a critical illness insurance plan provides an extra layer of financial security that can be important during times of need. Let's delve deeper to examine the difference between critical illness insurance vs health insurance, their benefits, and why you should consider both.
What is health insurance?
Health insurance is an insurance policy that covers the cost of medical treatments, including hospitalisation, surgeries, and doctor consultations. It ensures that policyholders do not have to bear the financial burden of hospital expenses.
Key features of health insurance:
· Covers hospitalisation expenses: Includes room charges, doctor fees, ICU costs, and medical tests.
· Cashless treatment: Many insurers offer cashless claims at various network hospitals.
· Pre- and post-hospitalisation coverage: Pays for expenses incurred before and after hospitalisation.
· Various options for add-on covers: Additional riders such as maternity benefits, OPD cover, and wellness programs can be added.
· Daycare procedures covered: Certain medical treatments that do not require extended hospital stays are included.
What is critical illness insurance?
Critical Illness Insurance is a critical health insurance policy that provides a one-time payment if a specified critical illness such as cancer, heart attack, or stroke is diagnosed. This amount can be used for medical treatment, domestic expenses, repayment of loans or financial obligations.
Key features of critical illness insurance:
· Lump sum payment: Provides a fixed amount upon diagnosis, irrespective of actual medical expenses.
· Covers specific life-threatening diseases: Includes cancer, kidney failure, organ transplants, paralysis, and more.
· No hospitalisation requirement: The payout is made upon diagnosis, even if hospitalisation is not required.
· Can be used for non-medical expenses: Unlike regular health insurance, the amount can be used for lifestyle changes, loss of income, or long-term care.
· One-time payment: Once the claim is settled, the insurance policy terminates.
Critical illness insurance vs. health insurance: Key differences
Features
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Health insurance
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Critical illness insurance
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Coverage type
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Covers hospitalisation expenses, surgeries, and medical bills
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Provides a lump sum upon diagnosis of a critical illness
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Payout
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Reimburses actual medical expenses
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Pays a fixed amount, regardless of treatment costs
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Diseases covered
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Covers a wide range of illnesses and treatments
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Covers only specific critical illnesses
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Hospitalisation requirement
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Hospitalisation is necessary for claim approval
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No hospitalisation is required, payout is made on diagnosis
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Use of funds
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It can only be used for medical expenses
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It can be used for medical and non-medical expenses
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Policy duration
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Renewable every year
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Fixed-term, payout ends the policy
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Health insurance vs. critical illness insurance: Which one do you need?
While both types of insurance provide financial security, they serve different goals. Understand why you need both:
· Extensive coverage
Health insurance covers hospital expenses, while serious illness insurance provides a lump sum to handle further financial burdens.
· Increased medical cost
Some treatments cannot be fully covered under the usual health insurance scheme. A critical health insurance ensures that you have more funds.
· Debt management
If you have ongoing loans, a one-time amount can help you manage the EMI payment during recovery.
· Support for long-term care
Certain serious illnesses require long-term care, rehabilitation, or home modifications, which are not covered by health insurance.
· Protection against income loss
A serious illness can cause a loss of income. A one-time payment from a serious disease policy helps to cover daily expenses.
How to choose the right policy?
When choosing critical illness insurance vs health insurance, consider the following factors:
· Existing coverage
If you already have health insurance, consider if it includes critical illness or if a separate policy is required.
· Economic objective
Evaluate your financial obligations and choose a policy that provides adequate protection.
· Exclusions
Understand which critical illness diseases are covered and if there is any waiting time or exclusion.
· Assess your health risks
If you have a family history of critical illnesses like cancer or heart disease, a critical illness insurance plan is essential.
· Compare coverage
Check what medical conditions and expenses are covered under each policy to avoid surprises during claims.
Wrapping up
Health insurance is necessary to cover major medical treatment expenses, but it may not be sufficient to cover critical illness insurance as well. Critical health insurance acts as an economic security trap by providing a lump sum that can be used for treatment, recovery and hospitalisation expenses.
For complete financial security, both types of insurance ensure that you are ready for a medical emergency. To protect your future, consider a combination of critical illness insurance with your current health insurance. Want to help you choose the right insurance plan? Contact Generali Central today!
Frequently asked questions (FAQs)
1. What is the main difference between critical illness insurance and health insurance?
Health insurance covers hospitalisation and medical expenses, while critical illness insurance provides a lump sum payout upon diagnosis of a serious illness.
2. Can I buy critical illness insurance if I already have health insurance?
Yes, you can have both policies. Critical illness insurance complements health insurance by providing additional financial support for severe illnesses.
3. Does critical illness insurance cover all diseases?
No, it covers only specific life-threatening illnesses such as cancer, heart attack, kidney failure, and stroke. Always check the policy details for the list of covered conditions.
4. Do I need to be hospitalised to claim critical illness insurance?
No, hospitalisation is not required. The payout is made upon diagnosis of a covered critical illness, regardless of treatment or hospital stay.
5. Is critical illness insurance a one-time payout?
Yes, critical illness insurance provides a one-time lump sum payment upon diagnosis. Once the claim is settled, the policy terminates.
