Difference Between a Critical Illness Insurance Policy And Health Insurance Policy

Difference Between a Critical Illness Insurance Policy And Health Insurance Policy

It’s crucial to understand the difference between a critical illness insurance policy and a health insurance policy in order to know the significance of both in your life. After all, it’s a common dilemma among people about whether they should opt for a critical illness policy or not. Here are a few facts that will help in clearing out that confusion once and for all.

Differences In The Coverage Provided on Health Insurance

There are considerable differences in the nature of coverage offered by both the insurance plans. Health insurance plans offer extensive coverage that includes all the expenses, right from transportation costs to the actual treatment or steps that are taken to recover at home after getting discharged. Some insurers also offer things like restoration sum, maternity expenses, domiciliary hospitalization, and so on.

These are not the features that you would find in a critical illness plan. Such plans focus only on a particular illness and pay a lump sum amount upon the diagnosis of the disease.

The comprehensiveness of the Coverage 

When it comes to health insurance, several illnesses are taken into consideration. However, when it comes to critical illness insurance, it only covers big surgeries and diseases, which can cost you a lot. 

The Way Benefits Are Structured of Health Insurance

Health insurance policies are based on the simple principle of indemnity, and thereby, the cost of hospitalization and other inpatient expenses are covered. In case of making an insurance claim, you need to submit the bills that support your claim, and the insurer pays a predetermined amount, accordingly.

On the other hand, the critical illness policies are like fixed benefit policies where you get the insured sum only if you are diagnosed with a critical illness that’s listed in your policy. The benefit you’re paid is not dependent on the actual cost of treatment. The money that you get can be used for treatment or to pay off your liabilities.

But, when it comes to health insurance, the claim is received only for the medical costs that have been incurred and not for any other purpose, unlike the critical illness policies.

Critical Illness Policies Are Cheaper

Most health insurance policies are pretty much extensive in nature when it comes to their coverage, their premiums are usually higher than critical illness policies. You can get the critical illness policies at a cheaper rate compared to the health insurance policies.

Differences In Insurance Policy Period

Both the insurance plans come with different policy tenures. Generally, health insurance policies have a tenure of one year and need to be renewed every year. On the contrary, critical illness policies have a longer tenure than that. You can have a plan for fifteen to twenty years. However, you will have to renew your policy at regular intervals to enjoy its benefits.  

Variations In Terms Of Waiting Period

A health insurance policy usually has a waiting period of about thirty to ninety days based on the insurer. Within this time period, you are not allowed to claim your policy, excluding accidental claims.

This is different from critical illness policies, where you need to wait for nine days, along with thirty days of the survival period after getting diagnosed with a disease. It’s worth mentioning that the waiting period is not the same for every insurance provider.

Regulations For Claim Reimbursement

The insured has to be hospitalized for at least twenty-four hours for him/her to get the health insurance coverage. The treatment costs and the medical bills get reimbursed depending on the documents submitted by the insured. The settlement can also be done after the discharge in situations of cashless treatment.

In terms of reimbursement claims, the insured needs to initially pay the medical bills and register the claim later, with all the original bills and discharge details. The claim request and the documents are verified by the insurer before paying the amount. When it comes to critical illness policies, the insured needs to serve the 30-day survival period after getting diagnosed with a disease, in order to claim the insured sum in full.

Summing Up of Health Insurance

Health insurance policies are purchased for covered planned or emergency hospitalization expenses. And, critical insurance policies come in handy to mitigate the financial hardship resulting from serious illnesses. Both these policies are meant to cater to a specific purpose and supplement one another in some manner. Thus, both the plans are alike in terms of their importance in your life.