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It's Not Either Mediclaim Or Critical Illness. It's Both.

The levels of pollution in the air are high. The levels of pesticides in food articles are high. The levels of stress in life are high. Hence, the chances of a person contracting some disease are high.

Further, the costs of medical treatment are also high.

Therefore, health insurance policy against medical related problems is a MUST. As I have stated earlier health insurance equals wealth insurance.

In this regards, people often confuse between the conventional Mediclaim Policies and the Critical Illness Covers. There is a debate in their minds whether to buy a mediclaim policy or a critical illness cover.

IMPORTANT NOTE: It is not as if you have to choose one of the two. Both are equally essential.

Why?

Suppose a person suffers a massive heart attack. He would have to be naturally admitted to a hospital. There he would have to incur many costs such as room rent, operation theatre charges, doctors’ fees, tests, medicines and much more.

As you are all aware, a typical indemnity-based Mediclaim Policy would take care of these expenses (including pre and post-hospitalization expenses as per the terms of the policy).

So far so good.

Now we shall see the importance of Critical Illness cover.

mediclaim-plus-critical-illness
Let's say he has to stay in hospital for 15-20 days and is thereafter discharged to go home. But after a serious heart attack and its' medical treatment, he will not be a position to immediately resume his normal activities. He may be advised a 3-4 months' of rest.

During this period, he cannot go to work and hence he earns no income. But his daily household expenses have to be met. Plus there will be EMIs, school fees, policy premiums, etc. to be paid.

So what does he do?

He uses his Critical Illness policy.

In a Critical Illness Policy, the person gets the entire sum assured soon after the diagnosis of ‘pre-specified’ diseases e.g. heart attack. You don't have to give any proof of expenses incurred / to-be-incurred. In fact you don't need to specifically use this money for treatment. Thus, this money can be used to meet day-to-day expenses, till the person resumes his job.

Therefore...
... while the mediclaim policy takes care of the expenses incurred on treating the disease
... a critical illness policy can be used to cover the loss of income during recuperation period.

Here, someone might say that why not take a large critical illness policy and then use this money to meet both the hospital bills and the household expenses?

The problem with this approach is that a critical illness policy covers only a few 'specific' diseases. Taking only a critical illness policy will not cover all ailments and illnesses. What if you get a disease not covered under a critical illness policy? Therefore, you cannot — and should not — avoid a separate mediclaim policy. 

By the way, you will come across a variant to the conventional mediclaim policy viz. the Daily Hospitalisation Cash Plan, which can play the same role as a Critical Illness plan. It, however, suffers from some drawbacks. Hence, it would be prudent to avoid such plans.

A combo of conventional mediclaim plan + critical illness plan is a more simpler, comprehensive and cheaper strategy to cover your risk against medical exigencies.

The only question that remains to be answered is : Do you buy a rider or a standalone policy.

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