Difference Between Standard Health Insurance vs Critical Illness Insurance

There are many health insurance plans available in the market today. Many people believe that a normal health plan will cover the basic cost of health treatment in case you are hospitalized or have a critical illness. However, this might not be the case. There is a difference between a standard health insurance plan and a critical illness cover. A regular health plan will only reimburse the expenses and will cover hospitalization costs. However, a critical illness health insurance plan will provide you an amount at the time of being diagnosed with any of the critical illnesses that are covered in the policy.

Differences Between Critical Illness & Standard Health Insurance

Listed below are the differences between the two types of health insurance plans to help you make the right buying decision.

1. Coverage

A medical insurance plan will provide for the cost of hospitalization in case of a medical condition or an accident. It will also take care of domiciliary treatment and the pre and post-hospitalization expenses. In contrast, a critical illness plan will provide coverage based on the insurer you choose. The policy will cover events that are outside the purview of a regular health plan. It will provide coverage over and above a normal health plan. It also covers events such as a change in lifestyle, loss of income, post-operative care, and permanent disability that are outside the scope of a regular health plan. The coverage also involves expenses incurred because of changes in lifestyle after the diagnosis of a critical illness.

2. Cost

When you buy online health insurance, you will make a comparison of the premium amount you will have to pay for the same. The normal health insurance policy will have a higher premium because it will cover a wider scope of events. On the other hand, a critical illness health cover will provide cover for specific illnesses only and you will receive the entire sum assured as a benefit at the time of diagnosis. Hence, the cost will be slightly lower.

3. Sum Insured

A critical illness plan is very specific to certain critical illnesses. Hence, it has a low coverage amount. The maximum sum insured offered by reputed insurance companies for enhanced protection is INR 1 crore. Conversely, a health insurance plan has a higher coverage amount and the sum insured can be as high as INR 2 crore.

4. Benefit Structure

A health insurance plan will pay the actual cost of hospitalization to you. When you make a claim, you submit the relevant bills and medical records and receive the cost incurred by you, which is subject to the maximum sum assured. The lump sum received can be used only for the medical expenses incurred. On the contrary, a critical illness plan is a fixed benefit plan, which means you receive a certain lump sum at the time of diagnosis of a critical illness. The benefit will not depend on the actual costs incurred by you. You can use the lump sum to meet your expenses, avail of the best treatment, or pay your debts.

Both insurance plans are critical for individuals. You need to have a health insurance policy to ensure that the cost of medical treatment does not break your bank. Alternatively, you need to invest in a critical illness insurance plan to make sure that a serious illness does not affect your family or savings. Choose a plan keeping your age, health, and financial requirements in mind.