Insurance is a necessity for everyone, and it helps us safeguard our lives and assets against unexpected events that can occur in the future.
Health insurance and critical illness insurance are two essential types of insurance that people can buy to protect themselves from different kinds of risks. Though both insurance plans are related to health, they differ significantly in terms of coverage and benefits. In this article, we will explore the differences between critical illness insurance and health insurance.
Health Insurance
Health insurance is a type of insurance that covers the medical expenses incurred by the insured person in the event of illness, injury, or hospitalization. It provides coverage for a wide range of medical expenses, such as doctor’s fees, hospitalization expenses, surgery costs, ambulance charges, and diagnostic tests. Health insurance plans can be purchased individually or provided by the employer as part of the employee benefits package.
The benefits of health insurance vary depending on the type of plan and the insurance provider. Some health insurance plans offer coverage for pre-existing conditions, while others may not. Most plans have a limit on the amount of coverage that can be availed of in a year, and some also have a deductible amount that needs to be paid by the insured before the insurance kicks in. Health insurance can also cover the cost of preventive care services such as regular check-ups, vaccinations, and screenings.
Critical Insurance
Critical insurance, on the other hand, is a type of insurance that provides coverage for critical illnesses such as cancer, heart attack, stroke, and kidney failure. It provides a lump sum payment to the policyholder upon diagnosis of a critical illness, which can be used to cover the costs of treatment, lost income, and other expenses.
These insurance policies cover a specified list of illnesses, and the benefits are paid out only if the policyholder is diagnosed with one of the covered illnesses. The policyholder must survive for a specified period after the diagnosis to receive the benefits, which is usually 30 days. Critical illness insurance policies can be purchased individually or provided by the employer as part of the employee benefits package.
Differences Between Health Insurance and Critical Insurance
The primary difference between health insurance and critical illness insurance is the type of coverage they provide. Health insurance covers a wide range of medical expenses, while critical illness insurance provides coverage for a specific list of critical illnesses. Health insurance covers both minor and major illnesses, while critical illness insurance provides coverage only for critical illnesses. Let’s take a look at some differences between health and critical illness insurance.
Coverage
Health insurance covers medical expenses related to illness, injury, or hospitalization. Critical illness insurance, on the other hand, provides a lump sum payment in the event that the policyholder is diagnosed with a critical illness, such as a heart attack, stroke, or cancer.
Purpose
The main purpose of health insurance is to provide financial protection against unexpected medical expenses. Critical illness insurance is designed to provide financial support if the policyholder is unable to work due to a critical illness. It can also cover other additional expenses that may not be covered by health insurance or help pay for medical expenses that exceed the coverage limits of health insurance.
Cost
Health insurance premiums are typically higher compared to those of critical illness insurance. This is because health insurance covers a wide range of medical expenses and is more comprehensive in its coverage.
Payout
Health insurance pays out medical expenses as they are incurred, whereas critical illness insurance pays out a lump sum payment upon diagnosis of a critical illness.
Conclusion
In conclusion, health insurance and critical illness insurance are both essential types of insurance that provide coverage for different types of risks. Health insurance covers a wide range of medical expenses, while critical illness insurance provides coverage for a specific list of critical illnesses. The benefits of health insurance are paid out as reimbursement of medical expenses, while critical illness insurance pays out a lump sum upon diagnosis of a covered critical illness.
It is important to note that critical illness insurance is not a replacement for health insurance. They serve different purposes and can complement each other. Therefore, it is recommended to have both types of insurance to ensure maximum protection against unexpected medical expenses.
Frequently Asked Questions
What is the difference between Health Insurance and Critical Illness Insurance?
Health insurance provides coverage for medical expenses, while critical illness insurance provides a lump sum payment in the event that you are diagnosed with a serious illness. Health insurance is designed to cover the cost of medical treatment, while critical illness insurance is designed to provide financial support during a time when you may be unable to work or have additional expenses due to a serious illness.
Do I need Both Health Insurance and Critical Illness Insurance?
It depends on your individual needs. Health insurance is important for covering the cost of medical treatment, while critical illness insurance provides additional financial support in the event that you are diagnosed with a serious illness. You may want to take both types of insurance if you have a family history of serious illness or work in a high-risk job.
Can I use the Lump Sum Payment from Critical illness Insurance to Cover Medical Expenses?
Yes, you can use the lump sum payment from critical illness insurance to cover your medical expenses as well as other expenses while you are unable to work.
CHECK THIS OUT:
