Health Insurance vs Critical Illness: Which Company is Best in 2021?

Health Insurance vs Critical Illness:-

A health insurance plan and a critical illness plan are both important to safeguard yourself against unexpected medical costs. You do not know when you will fall sick or develop some kind of critical disease. To ensure that you do not have to bear all the expenses on your own, you either must have one of the insurances or maybe both.

Health Insurance vs Critical Illness:

Now, you might want to know what are health insurance and critical illness insurance, right? Let’s check them out.

Health Insurance

A health insurance plan generally covers all of your medical expenses. These include room rent, doctor’s fee, pre and post-hospitalization charges, ambulance fees, and prescribed medicines. The insurance company may directly settle the amount with the hospital directly. However, in some cases, you might have to pay the expenses out of your pocket and the insurance provider will reimburse the amount.

Benefits of Health Insurance

A health insurance plan provides you with the following benefits:

  • Offers you protection against uncertain medical expenses
  • Restoration of the amount when the sum insured is over while treating an ailment
  • Helps to manage expenditures beyond hospital charges
  • Coverage for pregnant women and newborn
  • Home hospitalization
  • Pre and post-hospitalization expenses coverage
  • Accidental hospitalization

Critical Illness Policy

A critical illness insurance plan offers you coverage against serious illness, surgeries, or life-taking diseases. This is actually an add-on coverage of a health insurance plan. You can claim for the amount without being hospitalized. The insurance company will pay you a lump sum amount once you are diagnosed with a critical disease. This money will be very crucial for your future expenses, such as replacing income, home nursing, and travel expenses. Some of the critical diseases that a critical illness policy covers are –

  • Paralysis
  • Heart attack
  • Coronary artery bypass surgery
  • Major organ transplant
  • Stroke
  • Cancer, etc.

Benefits of Critical Illness Policy

The following are the benefits of a critical illness plan:

  • Offers a lump sum amount to cover medical and household expenses
  • Provides tax benefit under Section 80D of the Income Tax Act
  • Gives you peace of mind
  • Covers treatment cost even while you are in a foreign country.

So, what makes critical illness policy apart from health insurance?

The core difference between Health Insurance and Critical Illness Plan

Health Insurance

Critical Illness Cover

A health insurance plan will reimburse the total amount you spent during hospitalization. A critical illness will provide a lump sum when diagnosed with a critical illness.
It covers the entire cost of your treatment during hospitalization. It provides some amount that you can use as per your need.
Offers widespread coverage for several illnesses. Provides only coverage to critical diseases leading to major illness and surgical procedures.
A health insurance plan will safeguard guard you against financial insecurity during medical emergencies. You can choose both the policies depending on your health and age. Critical illness policy is the best fit for those who are at high risk of being diagnosed with a critical illness. You can add a critical illness policy with a regular health insurance plan depending on the costs and risks.
Renewal of the policy is on annual basis. It has a long term renewal, 20 years for instance.
With a health insurance plan, you get coverage for a lifetime. With a critical illness policy, you get coverage until 75 years of age or death.
The policyholder is the primary beneficiary of a health insurance plan. His/her family will get the collateral benefit of protection against financial difficulties. Both the policyholder and his/her family are equally benefitted from a critical illness policy. They can use the lump sum amount for any purpose according to their need.
Premium increases with the insured’s age. Premium does not change throughout the lifetime, although the company might revise the price after getting approval from the regulator.

These are the major differences between a health insurance plan and a critical illness policy. Many people opt for the critical illness policy as an add-on to the regular health insurance plan. This keeps them tension-free and gives them peace of mind. Now, you should decide which of the policies you will select to secure yourself and your family.

Frequently Ask Questions:

What diseases does a critical illness policy cover?

A critical illness plan provides you coverage against 30 plus critical diseases. Some of them are –

  • Cancer
  • Heart attack
  • Stroke
  • Paralysis
  • End-stage kidney failure
  • Coma
  • Open chest heart valve surgery
  • Organ/bone marrow transplantation
  • Alzheimer’s disease
  • Benign brain tumor
  • Severe bacterial meningitis, and much more.

Is Rheumatoid Arthritis a critical illness?

Yes, Rheumatoid Arthritis is a critical illness. However, some insurance companies may not include Rheumatoid Arthritis in their critical illness policy. In such a case, you have to choose it as an add-on that may increase the cost of your policy.

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