In the current market of health insurance policies, you would come across a wide range of options. Hospitalization plans, family floater plans, and critical health plans are some of them. Among them, having a critical health insurance policy is perhaps quite necessary these days. A critical illness plan covers the expenses of medical treatment in case the policy holder suffers from a critical illness. When we say critical illness, we usually mean serious conditions like heart attack, kidney failure, liver damage, coma, etc.
A few years ago, people were not quite aware of the critical illness health policies, particularly in India. Life insurance was seen as the only saviour if something happens to the breadwinner of the family. But, the inception of critical illness plans has proved to be a boon for families belonging to the middle-income group. Even if the policyholder is not able to earn for his family, he will not have to worry about the medical expenses or other bills. To help you understand the difference between a life insurance a critical illness insurance plan in a better way, let us compare the basic aspects of these two policies.
The purpose behind
- Life insurance: When the breadwinner of the family dies, his life insurance policy comes into action, and it covers the expenses of his family for a particular number of years. The policy also covers other debts, like a mortgage. In fact, the hospital and burial expenses are also covered by the life insurance policies. In addition, the beneficiaries of the policy also get a certain amount of money.
- Critical illness insurance: This policy takes care of the entire medical expenses. Just like a life insurance policy, a critical illness insurance plan also serves as a source of income for the family; but, only for a particular number of years. So, if the breadwinner is unable to work for a few years, there is no need for his family to worry about. High-ticket debts are also covered by this kind of policy.
Control of funds
- Life insurance: In this case, since the policy kicks in only after the death of the insured, therefore the terms are pre-decided. At the time of buying a life insurance policy, the person has to allocate the ratio of sum each beneficiary will get from the policy. So, once the beneficiary receives the specified amount, it is up to him to decide how he will spend the money.
- Critical illness insurance: In this case, the policyholder decides how to make use of the funds. The fund can be used by him for the treatment of his illness; he may also use it for his family’s day-to-day expenses. So, the policyholder gets complete freedom in this regard.
Basis for payment
- Life insurance: Like it was mentioned above, this kind of policy kicks in only after the death of the policyholder. Almost all sorts of deaths are covered in the life insurance policies. However, death from suicide is not considered here.
- Critical illness insurance: In this case, the payments are disbursed only if the policyholder is diagnosed as suffering from any kind of critical or terminal illness. Some of the conditions that are covered are- cancer, heart stroke, coronary artery disease, heart valve replacement, angioplasty, kidney failure, paralysis, coronary artery by-pass surgery, and coma.
What are the pros and cons of a life cover?
First of all, let us know about the pros. The premiums of life insurance policies are much cheaper. This is why almost anyone can afford to buy a life cover. Secondly, the upper age limit for buying a life cover is much higher. The tax-free aspect is another advantage you get. Plus, the process and requirements for making a claim are simpler here.
Now, let us talk about the cons. It may not look exactly like a negative point; but, it is true that in the case of life insurance policies, the nominees get the benefit and not the policyholder. So, if a person has kids or aged parents to look after then only he/she should go for a life cover.
What are the pros and cons of a critical illness cover?
Talking about the pros first, the biggest one perhaps is the fact that the policyholder can enjoy the benefits even when he is alive. The treatment cost associated with critical illnesses can be very huge. Fortunately, the sum insured offered by this kind of policy is usually sufficient enough to meet the medical treatment cost.
Coming down to the cons, the higher premiums is the first, to begin with. Plus, the requirements for meeting the clause of this kind of policy are more stringent. But, overall it can be said that a critical health insurance plan is of great importance.