How does critical illness cover differ from regular health insurance?

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The critical illness cover is a type of life insurance that assists when diagnosed with any of the listed serious illnesses in your policy. Your insurer pays a one-off tax-free payment. The money can finance bills of choice, like rent, debts, or mortgage, that the policyholder is unable to because of the illness.

On the other hand, regular health insurance (also known as private medical insurance) supplements the funds issued for healthcare by the National Health Service(NHS). If you’re employed, there’s a chance this policy is part of your employee benefits package. With it, you can choose the level of care you get when sick as well as the time of the disbursement of the healthcare fees.

Although both forms of insurance help in times of sickness, they are not similar. Below we discuss how they differ from one another:

Differences in policy definition

Critical illness cover assists policyholders after diagnosis with a specific medical condition or injury that’s included in the policy. The insurer also states in advance in the policy how serious the condition has to be for you to claim when the risk occurs.

Some examples of illnesses that the policy defines as critical include:

• Heart attack
• Stroke
• Specific types and stages of cancer
• Genetic or acquired conditions like multiple sclerosis.

For private medical insurance, the policy defines assistance on the healthcare aspect only. Depending on your policy and amount of cover assured, it can pay the costs of in-patient, out-patient, or both forms of treatment. Some policies might also require you to pay a small fixed fee for in-patient services on top of the healthcare funds that you’re entitled to in your insurance cover.

Examples of treatments that the regular health insurance covers include:

• Laboratory tests
• Day-care surgeries
• Access to specialists and consultants

Differences in the non-covered

As earlier mentioned, the critical illness policy defines the specific medical conditions which it covers. The non-covered include health problems which the policyholder already has while buying the policy. You cannot cover a risk that has already occurred; only an impending one.

Also, the insurer might list the set of conditions that are outside the cover. Reading the policy details will help you familiarize yourself with what’s included or excluded in this cover.

The regular health insurance specifically for private policies doesn’t cover the following:

• Pre-existing medical conditions (diseases you already have when buying the policy)
• Organ transplants
• Childbirth and pregnancy costs
• Cosmetic surgeries that alter your appearance
• Chronic illnesses like diabetes, hypertension, HIV/Aids-related illnesses

Besides, some conditions are not ordinarily covered unless the policyholder chooses to have them included in the policy. For example, costs associated with the treatment of depression, mental health, and sports injuries.

Differences in the target group

Who needs the critical illness cover? Anyone who:

• doesn’t have sufficient savings to support them if they suddenly become seriously ill or disabled.
• Lacks an employee benefits package that can cover them for a long period away from work because of sickness.

Who doesn’t need the critical cover? You might not need this policy if:

• You have a partner or an income stream that can cover living costs regardless of your health status.
• You have sufficient savings to help you cover regular expenses such as loans, mortgages, bills, or medical costs.
• You have a reliable life insurance cover that your employer pays for on your behalf under the employee benefits scheme.

On the other hand, the regular health insurance targets people who:

• Prefer to get treatment in private hospitals rather than public hospitals.
• Want cover for treatments or drugs that are unavailable on the NHS. For example, specialist surgeries or treatments, which NHS doesn’t cover because of their high cost or expertise involved.
• Don’t want to wait for help from the NHS. This applies for people with conditions that may worsen or become too costly to treat if it takes too long to get medical care.

It may not be a suitable insurance plan if:

• You have a dependable alternative insurance plan that can cover your expenses during sickness.
• The NHS offers satisfactory care for your situation.
• You have a budget for basic insurance or life insurance when you have dependents.
• You have outstanding debts and lack savings. Money is best-utilized to meet urgent costs.  

 

Which of the two sickness insurance plans suits your situation best? Let us know below.