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Critical Illness Vs Disease-Specific Cover: What Should You Buy?

Health insurance companies provide a plethora of products to cater to different needs of people. More recently, the insurance companies have come out with disease-specific covers.
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A disease-specific plan provides cover for the cost of treatment of a particular disease at all stages.
A disease-specific plan provides cover for the cost of treatment of a particular disease at all stages.

Highlights

  1. Among many products, health insurers also offer disease-specific covers
  2. Critical illness plans provide cover against a number of diseases
  3. Disease-specific plans are cheaper than critical illness covers
Health insurance companies provide a plethora of products to cater to different needs of people. More recently, the insurance companies have come out with disease-specific covers.

Critical illness covers, which cover policyholders in the event of being diagnosed with any of the specified diseases, have been there in the market for quite some time.

Let's first understand the difference in the two to help you decide which one to buy.

A disease-specific plan, as the name suggests, provides cover for the cost of treatment of a particular disease at all stages - be it at a diagnosis stage or advanced treatment.

"Both reimbursement based policies and fixed benefit policies exist in case of disease specific policies," says Mahavir Chopra, director health, life and strategic initiatives at Coverfox.com, an insurance portal.

Under a critical illness policy, a lump sum amount is paid in case of diagnosis of a particular disease, if the disease is in the list covered under the policy. Critical illness provides cover against a number of diseases.

"Critical illness plans are purchased to cover the risk of loss of income due to a major disease," says Mr Chopra.

Usually, a good critical illness plan covers anywhere from 10 to 30 diseases, he adds.

On the other hand, "disease specific plan covers all stages of disease unlike critical illness and waives future premium under some cases", says Saroj Satapathy, CEO of Ideal Insurance Brokers.

Disease-specific plans are cheaper than critical illness covers.

For example, HDFC Life Cancer Care Silver provides a cover of Rs 10 lakh for a premium of Rs 1,024 while Apollo Munich Optima Vital, a critical illness cover, provides a cover of Rs 10 lakh for a premium of Rs 6,612 and covers 37 diseases.

Max Bupa Health Assurance, a critical illness plan, provides a cover of Rs 10 lakh against 20 diseases for a premium of Rs 5,363 while Aegon Life iCancer-Premium, a disease-specific plan, provides cover of Rs 10 lakh for Rs 2,493. (premium details provided by Coverfox.com).

"Disease specific covers caters to someone who is looking for a low-cost simple insurance to cover a specific risk he feels he is exposed to," says Mr Chopra.

Experts feel that if a person has a family history of a particular ailment, he/she should buy a disease-specific plan along with a health insurance plan. Else, a critical illness plan will do fine, they say.

"Only if there is a specific feature, benefit or disease that is required but not covered under the critical illness plans or if there is a budget constraint should one buy a disease-specific plan; otherwise critical illness plans are a better bet," Mr Chopra further says.

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