Difference Between Health Insurance and Critical Illness Cover

Getting sick can be tough, not just physically, but also financially. A regular health insurance plan can generally help with your hospital bills in such situations. But what if you are diagnosed with a serious condition that needs long-term care and time off work? That’s where critical illness insurance comes in. It offers extra financial support when you are diagnosed with a critical illness.

Understanding the difference between critical illness insurance vs health insurance can help you choose the right cover.

What is a health insurance policy?

A health insurance plan offers financial safeguard to manage the cost of medical treatment during a health emergency. It usually covers expenses related to hospitalisation, surgery and other inpatient procedures. The policy works as a contract between you and the insurer, detailing the premium, coverage, features and terms. Most health insurance plans are for a year and need to be renewed annually. You can customise your coverage to suit different medical needs and budgets. These include individual, family floater, group or top-up plans.

Benefits of health insurance

Having a health insurance policy offers several benefits, such as:

• Cashless hospitalisation: Health insurance lets you get treatment at network hospitals without paying upfront.
• Broad coverage: It pays for hospitalisation, surgeries, diagnostic tests, ambulance charges and more.
• Tax benefits: You are eligible to claim tax deductions on the premiums you pay for health insurance under Section 80D of the Income Tax Act.
• No-claim bonus: This increases your sum insured each year you don’t raise a claim.
• Maternity cover: Many plans cover maternity and newborn expenses after a waiting period.
• Wellness benefits: They include annual check-ups, fitness rewards, teleconsultations or counselling.
• Customisable options: Add riders like critical illness cover, room rent waivers or OPD benefits.

What is critical illness insurance?

Critical illness insurance is a type of plan that gives you a lump-sum payout in case you are diagnosed with a critical illness like cancer, a heart attack or kidney failure. You can use the money for treatment, daily expenses or paying off debt. It is designed to alleviate financial pressure when a major illness impacts your income as well.

Benefits of critical illness health insurance

Critical illness cover is meant to reduce the financial burden that comes with life-threatening illnesses. Let us understand how it helps:

• Lump-sum payout: You receive the full insured amount upon diagnosis, regardless of the treatment costs.
• Flexible use: The money can be used for medical treatment, daily expenses or anything else you need.
• Covers major illnesses: It provides financial support for conditions like cancer, heart attack or kidney failure.
• Income support: The payout helps cover lost income if your condition affects your ability to work.
• No hospitalisation needed: The claim is approved based on diagnosis. You do not need any hospital bills or proof of treatment.
• Works with health insurance: It complements a regular health plan by covering the non-medical expenses associated with a serious illness.

Claim process under medical insurance

The process of claiming your health insurance depends on whether you are availing of a cashless facility or filing a reimbursement claim. Let’s see how it works:

• Cashless claim: Show your health card and fill out a pre-authorisation form if you are admitted to a network hospital. Your hospital bills will be settled directly by the insurer without any upfront payment.
• Reimbursement claim: Under this, you will need to pay the bills first if you are treated at a non-network hospital. You can submit all original documents, like the discharge summary, bills and a filled claim form, to the insurer after the treatment. They will reimburse you within a few days if everything is in order.

Claim process under critical illness insurance

Here is how the process generally works:

• File a claim after being diagnosed with a covered critical illness.
• Ensure the usually required survival period of around 30 days has passed.
• Submit the filled claim form with documents like the diagnosis report, medical certificate, ID proof and policy details.
• The insurer will review the documents. They will release the full insured amount as a lump sum if the claim is approved.

What is the difference between health insurance and critical illness insurance policy?

Here is a comparison of critical illness vs health insurance:

Critical illness cover vs health insurance: which one to choose?

Having standard health insurance may not cover every expense during an illness. Serious health issues like heart disease, organ failure or cancer often lead to huge expenses and time away from work. It is worth considering critical illness insurance in addition to your standard health plan if you have a family history of serious illnesses.

Conclusion

Choosing between medical insurance vs critical illness insurance is more about understanding your risks. Think about your medical history, lifestyle and family background. If there is a higher chance of developing a critical illness, it makes sense to consider that possibility now rather than later. Compare health insurance vs critical illness insurance and consider combining the two to prepare for the unexpected costs.

FAQs

1. What is the difference between health insurance and critical illness insurance?

The difference between critical illness and health insurance is that health insurance covers treatment costs, while a critical illness policy provides a one-time lump-sum payout upon diagnosis of a serious ailment.

2. How is critical illness cover vs health insurance different?

Critical illness covers a wide range of expenses after serious illness; health insurance handles hospital-related bills only.

3. What does critical illness vs medical insurance mean in terms of diseases?

Medical insurance covers general healthcare; critical illness insurance is for specific life-threatening conditions.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.