Difference between critical illness insurance and health insurance

Health insurance is a type of insurance policy, in which the insurance company gives money to the insured for the cost of their treatment in case of any kind of medical emergency. The health insurance plan chosen by the insured usually provides coverage for surgery, daycare treatment and other medical expenses. Under the myUpchar Bima Plus health insurance, your hospitalization, as well as pre and post hospitalization, charges are covered.

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Simply put, health insurance is a contract between the insurance company and the insured, in which the insurance company provides coverage on medical expenses to the insured for a specified period. The duration of the insurance, the number of family members covered under it and the diseases covered are usually mentioned in the insurance policy documents.

Apart from this, the premium paid can also get you a special tax exemption under section 80D.

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As mentioned above, regular health insurance is able to provide limited offers and benefits. However, when you are in the grip of a serious disease, like cancer, stroke or heart disease, then you’ll need special financial help. In such critical situations, the help you get from a standard health insurance policy may not be enough. Critical illness insurance is one of those insurance policies, which have become extremely important in today's times.

With the help of this plan, you get financial coverage if you have purchased critical illness insurance and unfortunately you get a serious illness (cancer, heart disease, etc.). If someone in your family has had a history of cancer or stroke, you are at increased risk of developing a genetic condition. Buying a critical illness insurance plan is a step towards safety in case you have a family history.

Since the medical expenses are constantly increasing, a normal health insurance plan will not be able to help you with critical illnesses and for this reason, it is necessary to have a critical illness insurance plan.

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Now that we know what health insurance and critical illness insurance are, it’s time to discuss how they’re both different from each other.  It is also important for you to know how critical illness insurance is better than a normal health insurance plan in some cases. Following are a few key differences that may help you understand this better:

• Basic features: A general health insurance plan covers medical and OPD expenses during your hospitalization. However, it may also not cover all diseases during your hospitalization and may not cover your long hospitalization expenses.
• On the contrary, a critical illness insurance plan covers the cost of treatment of life-threatening diseases like cancer, bypass surgery, kidney diseases, etc. As soon as the insured suffers a serious illness, he gets the amount for the treatment expenses.
• Benefits: If you have bought general health insurance, then your medical expenses if hospitalized are covered, which is the main advantage of this plan. If you are getting treatment at a hospital within the network of the insurance company, you can also avail yourself of the cashless facility. In the cashless facility, the insurance company directly contacts the hospital and pays your medical bill. When you make a claim, your health insurance plan continues only till your entire sum assured is exhausted. If you are the holder of a critical illness insurance plan, it has certain benefits of its own. When you develop a serious illness, you get a tax-free amount. In this, the insured does not need to show the original bill, he can also get the amount for the coverage of medical expenses by showing the photocopy of the bill. As the entire amount is handed over in one go, the insured can use this money wherever they want.
• Coverage: Both the health insurance policy and the critical illness plan have a different scope of coverage. A health insurance policy covers accidents and many diseases. Health insurance also covers the cost of treatment of pre-existing diseases after a certain waiting period. Critical illness insurance, on the other hand, provides coverage for the cost of treatment of major and life-threatening diseases. The number of critical illnesses being covered in your insurance plan mainly depends on the insurer. If mentioned in the critical illness insurance plan documents, it also covers ambulance and post-operation care expenses.
• Sum assured claim: If you have purchased a health insurance plan and you have been hospitalized for more than 24 hours, your medical expenses are covered. However, if daycare is included in your plan, you may not need to be admitted for 24 hours. In some plans of health insurance, you can get reimbursement for your medical expenses by showing hospital bills after the completion of the treatment. Alternatively, if you have purchased a plan for critical illness insurance, then the sum assured is given to the insured according to his medical expenses. However, different insurance companies have different criteria; some companies pay the bill directly from the hospital, while some companies give the sum insured to the insured.
• Sum insured: Although the sum insured may vary from insurer company and individual insured, there are certain limits that apply to all. The amount covered for medical expenses may be higher in critical illness insurance as compared to health insurance plans. For example, if you have taken a health insurance plan and you suffer from a critical illness, then the medical expenses of its treatment may be more than the sum assured of your health insurance plan.
• Premium: The premium paid in a normal health insurance plan is high, as it provides coverage for every minor medical problem. The premium of a critical illness insurance plan is relatively lower, as this plan provides coverage only for the treatment of major and critical diseases. Thus, the premiums of a critical illness insurance plan do not have as much of an impact on your pocket as those of a health insurance plan.
• Covered members: A health insurance plan can be taken to cover the medical expenses of an individual or the entire family. Whereas critical illness insurance can be purchased for only one person. But the more members there are in the health insurance plan, the higher the premium of it and, compared to that, critical illness insurance turns out to be relatively cheaper.
• Waiting period: Health insurance and critical illness insurance both have a waiting period. If you have purchased health insurance, you can make a claim after one month of taking the plan (if you fall ill). Contrary to this, in the case of critical illness insurance, it takes up to three months for you to be able to make the claim. However, the waiting period can be increased or decreased depending on the health of the person insured.

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