Exploring the Differences Between Critical Illness Insurance and Health Insurance
Updated On Apr 27, 2021
Are you looking forward to securing your health with a health insurance policy? If so, why are you in search of a critical illness plan? In case, you have been thinking both to be one and the same thing, know that you are at mistake. While many people use traditional health insurance and critical illness cover terms interchangeably, the fact is that both are different from each other. Therefore, buying the right cover is extremely necessary so that one does not have to face disappointment at the time of a medical emergency.
6 Key Differences Between Critical Illness Insurance and Health Insurance
Below mentioned are 6 prime factors that make critical illness insurance and health insurance different from each other. Before you go ahead with the policy purchase, make sure you are aware of the differences between both and know what would work best for you.
|
Basis |
Health Insurance | Critical Illness Insurance |
| Expenses & Diseases Covered | Generally related to hospitalization due to illnesses/diseases/ailments | Covers expenses of all kinds under the lump sum amount provided on critical illness diagnosis |
| Benefit Model | Indemnity | Gives lump sum amount in a single transaction |
| Policy Period | Usually taken for a year | Taken for long time period |
| Waiting Period | 30 to 90 days | 90 days |
| Survival Period |
Not Available | 30 days |
| Policy Expiry |
Active till end of policy period; can be renewed thereafter | Becomes inactive when insured is diagnosed with a critical illness and gets the lump sum amount |
- Expenses & Diseases Covered - While a traditional health insurance policy primarily covers expenses related to hospitalization, critical illness insurance gives the policyholder a lump sum amount if they are diagnosed with a critical illness covered in the policy to cover all kinds of expenses, whether related to illness or in general. Talking about diseases covered, while a critical illness cover provides coverage for non-communicable diseases such as heart attack, cancer, stroke, kidney failure, and others, a regular health insurance policy covers hospitalization expenses due to different ailments/diseases/illnesses.
- Benefit Model - While a regular health insurance plan is an indemnity policy that provides cover for actual expenses incurred, critical illness insurance is all about the policyholder receiving a lump sum amount, irrespective of the actual cost incurred.
- Policy Period - A traditional health insurance policy is usually availed for a year at a time, requiring renewal every year, critical illness insurance is typically purchased for a long time period such as 15 to 20 years.
- Waiting Period - In case of a traditional health insurance, the waiting period is generally of 30 to 90 days (not applicable in accident cases). On the contrary, in case of critical illness insurance, the waiting period is 90 days from the commencement of the policy period.
- Survival Period - While there is no survival period in traditional health insurance, in case of critical illness insurance, the insured individual needs to survive for a minimum of 30 days after being diagnosed with critical illness for taking the benefits of the cover.
- Policy Expiry - While the health insurance policy remains effective till the end of policy period (can be renewed thereafter), critical illness insurance becomes inactive as soon as the insured is diagnosed with a covered critical illness and receives the lump sum amount.
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Final Words
Both critical illness insurance and health insurance policy are important in their own significant manner. However, it is important to note that a combination of health insurance and critical illness cover proves to be a comprehensive cover. Based on your needs you can choose either of the two or go with a cover that suits you the most.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
