Health Insurance -- An Insight

Health insurance is a catch-all term that covers three distinct policies.

1. Mediclaim Policy
2. Hospitalisation Policy
3. Critical Illness Policy

Lets understand a little bit about each one of them.

Mediclaim Policy
This health policy reimburses you the actual hospitalisation cost for treatment of any disease and is offered only by non-life insurers.

Hospitalisation Policy
In this health policy, you primarily get a daily allowance for every day spent in the hospital. Some policies also provide higher daily allowance for stay in intensive care unit (ICU).
Others have a provision for lump sum payment if you undergo any of the surgical procedures covered in the policy.

Critical Illness Health Policy
This policy is in a way a specification to any of the above two policies. The next type of health insurance covers critical illness. Given the increased stress and strain of modern life combined with unhealthy and sedentary lifestyles, most of us are prone to serious illness.

But advances in modern medicine ensure that most of us survive these. This, however, comes at a cost and makes a serious dent in our ability to pay, either from salary or business. This is where a critical illness cover can step in and pay off a lump sum benefit.

Most life insurers have for long offered these covers as riders (riders are covers for additional risks or to enhance the existing risk covers). Now, these critical illness covers are also being offered as standalone policies for specific illnesses like cancer . These policies are recommended for salary earners.

A relevant question would be whether one would need a hospitalisation policy if s/he already has a Mediclaim policy?

A Mediclaim policy only reimburses the expenditure incurred in the actual treatment of the disease/illness at a hospital. The policies offered by life insurers are actually an addition and not replacements for Mediclaim policies. It can not be replaced by any other kind of policy.

Under the umbrella of Hospitalisation and Critical Illness Policies, Life-Insurers provide excellent products. Such policies should be a necessary part of your risk cover portfolio.

Policies offered by life insurers (Hospitalisation and Critical Illness Policies) cannot be cancelled during their tenure.
Non-life policies (Mediclaim Policies) can be cancelled.

Also, policies issued by life insurers guarantee a cover during their entire tenure.

For more information, you might find these links pretty useful while deciding which one to choose:
http://www.apnainsurance.com/index.html