Given the rising medical costs, medical insurance has become a must-buy for all. Hence, you find most of them purchasing a health plan. But most assume that purchasing a health plan has given them protection and cover against most diseases and hospitalization costs. Unfortunately, this is not true.
There are various types of health plans like any other insurance plan. However, they can be broadly categorized into two types i.e. general health plan and critical illness insurance policy. Here, we understand what they are and what are the major differences between them so that you can take an educated decision about them. Read on!
- Ailments and expenses covered
Herein lies the basic difference between the two health plans. Typically, the traditional or general health plan covers the cost of hospitalization, pre- and post-hospitalization costs and other associated costs. It does not cover all medical bills or diseases. However, in a critical illness insurance policy, you are paid a bulk sum if you are diagnosed with a critical illness as specified by the policy.
In the case of being hospitalized and the total cost of treatment scanned; you find that hospitalization cost is roughly about 35 percent of total expenditure. Thus, you are merely purchasing insurance for roughly about that much with your general insurance plan. But if you receive a bulk sum in the critical illness plan; you can cover plenty of other costs as well, like the pathological tests, post-surgery care, etc. Thus, a critical illness plan provides you better financial security when you get diagnosed with a severe illness like cancer, heart attack, etc.
You should always opt for a plan that provides comprehensive cover, especially for critical diseases. The list of critical diseases varies from one insurance provider to another.
- Nature of the health plan
A general health plan is a typical indemnity plan that covers the actual cost incurred by you as specified by the policy. Today, most of them are cashless but you are still required to submit the invoices and all medical records for the claims to be approved. Here, you would need to bear the costs of those that are not covered by the policy. Thus, if you have a cover of Rs. 4 lakhs and costs covered by the policy is Rs. 2 lakhs; you would be given Rs. 2 lakhs even though your total expenditure could be around three lakhs or more.
However, in critical illness cover; you are given a bulk sum that is specified by the policy. If your cost incurred is less than that, you gain from the policy and it relieves your financial burden to a great extent. Moreover, you can adjust your expenses like room rent, doctors’ fees, etc. so that your medical cost falls within the budget. You do not get this flexibility to adjust with a regular medical plan.
- Policy period
A regular health plan is typically issued for a year and a maximum for three-years period and you need to renew it once it reaches its expiry term. In contrast, the critical illness cover is for a much longer period like 15 to 20 years.
- Waiting Period
A general health plan typically has a waiting period of 30 to 60 days before the cover gets activated. In contrast, the waiting period for a critical illness is 90 days or more before the cover gets activated.
- Premium amount
In contrast to a critical illness cover, the scope of coverage for medical conditions is higher. For instance, it will cover situations like accidents, maternity, general health checkup, etc. But a critical illness plan will only cover those medical conditions and diseases that are specified by the policy like paralysis, kidney failure, etc. Thus, the premium amount for a general health plan is much higher compared to a critical illness plan.
- Claim payment stipulation
A typical health policy would cover the costs specified in it if you are hospitalized for more than 24 hours. You are reimbursed after the treatment is complete and your submitted documents like the invoices and medical records have been approved.
But in a critical illness plan, you are given a lump sum if you survive 30 days after the surgery or diagnosis of the disease.
Moreover, you can be reimbursed multiple times in a general health insurance plan but you can make a claim only once with a critical illness plan.
- Members covered
You can buy a general health policy exclusive for yourself or your entire family as a family floater or group policy. But a critical illness plan is always an individual cover and needs to be purchased for each member of the family individually.
You can renew a general health policy once it reached its expiry irrespective of whether you made a claim or not. It continues for as long as the term of the policy is allowed by the insurance company. The term is typically your age like till you reach 65 years or even 75 years.
But you cannot renew a critical illness plan. It expires once you have been paid the sum insured by the insurance company.
The scope of coverage and benefits attached to each plan is different and each has its distinct importance. The best protection for you is to get both the plans for yourself for comprehensive coverage.