A lot of individuals are completely unaware as to the difference between a Critical Illness Insurance policy and a health insurance policy popularly known as Mediclaim. Deepak Khemani, personal finance expert and health insurance adviser, explains it.
The type…
Critical Illness insurance provides a lumpsum payment equal to the sum insured, if you are diagnosed with a specific illness covered by the policy and survive the waiting period, normally 30 days. It helps cover the high costs of treatment, hospitalization, and other related expenses.
Mediclaim insurance is a normal indemnity type health insurance policy. The term indemnity insurance refers to an insurance policy that compensates an insured party for damages or losses up to a certain limit. In other words, Mediclaim reimburses the actual medical expenses incurred during hospitalization, subject to the sum insured and other policy terms and conditions.
Keep this in mind: Critical Illness insurance pays a fixed amount regardless of the actual medical expenses, while a Mediclaim policy pays for or reimburses the actual expenses incurred during hospitalization.
The cover…
A Critical Illness policy covers specific critical illnesses listed in the policy, such as cancer, heart attack, stroke, and kidney failure, among others. It provides financial support for specialized treatments and lifestyle changes post the illness.
A Mediclaim policy is not restricted to a specific illness. It covers a broader range of hospitalization expenses, including room charges, doctor's fees, surgery costs, diagnostic tests, and pre and post hospitalization expenses, subject to terms and conditions.
Keep this in mind: Before you buy a policy, check the specific illnesses covered, waiting periods, and claim conditions.
The role…
One is not a replacement for the other. Both have a role to play.
Mediclaim is more comprehensive as it covers a wide range of medical expenses and provides a safety net against unforeseen healthcare costs. It is a primary health insurance choice. A Critical Illness policy is a valuable addition to your health insurance coverage.
Keep this in mind: Critical Illness insurance helps you cope with the financial burden of major illnesses and allows you to focus on recovery. It can be purchased as a standalone policy, but is increasingly being offered as an add on to a regular health insurance policy.
Before buying…
Both have their own advantages and should be considered based on your individual needs, healthcare requirements, and age. It would be wise to consult an experienced adviser to make an informed decision.
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