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I have a critical illness rider on my life insurance policy. Why do I need a separate health insurance policy?

The health insurance plan that includes the critical illness rider is a better bet than the life insurance policy that gives you the same benefit.

Apnainsurance.com Research Bureau

03 Dec 2007

Generally, you are advised that if you are already covered for critical illnesses on your life insurance plan and the insured amount is sufficient, you need not purchase a separate health insurance policy.

But, remember, a critical illness rider covers ONLY the critical illnesses specified in the policy - they do not consider hospitalization of ANY OTHER illnesses, disease, or injury. The insurer provides the insured with a lump sum immediately or within a few days of diagnosis of the specified critical illness. Typically, the plan ceases once this sum has been paid to the insured (although some insurers offer to cover the insured for the remaining specified illnesses at a lower premium rate and for a lower sum assured.)

A health insurance plan, on the other hand, would entitle you to be reimbursed in case of hospitalization for any illness, disease, or injury, as long as it is within the purview of the policy. More importantly, the policy is in force even after a claim has been made.

The best way to go would be a health insurance plan that includes a critical illness rider where the sum assured is automatically doubled in the event of a critical illness.

For example, a person purchases a health plan for Rs. 2 lakhs with a critical illness rider and then suffers from a heart attack. Expenses work out to Rs. 3.5 lakh. Since the person has a critical illness rider built into his/her health insurance plan, he/she can make claims including post-hospitalization costs of up to Rs. 4 lakh.

If this person had not purchased the critical illness rider, he/she would have been able to make a claim up to only the sum assured i.e. Rs. 2 lakh.

See also:

What is health insurance?

Do I need health insurance?

Miscellaneous Health insurance FAQs

Health Insurance FAQs about Coverage

Health Insurance FAQs about Claims

Health Insurance FAQs about Premiums