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Difference Between Critical Illness and Disease-specific Plans

Team AckoSep 23, 2021

If you are new to health insurance, you might find it slightly tricky to wrap your head around the concept. However, if you narrow things down, they can become a lot clearer. For example, this article focuses on two important health insurance coverages: Critical Illness Plan and Disease-specific Plan. These covers are either in-built or considered as add-ons to health insurance plans. Read ahead to know the meaning and difference between Critical Illness and Disease-specific Plans so that you can make an informed choice.

Difference Between Critical Illness Plan and Disease Specific Plan

Critical Illness vs Disease-specific Plans

Here’s a table that will highlight the key difference between these two important health insurance covers.

Parameters Critical Illness Plan Disease-specific Plan
Meaning A Critical Illness Plan insures you against a bunch of life-threatening illnesses/diseases. A Disease-specific Plan insures you against one specific illness/disease. This plan is also known as a niche plan as it caters to a specific disease.
Coverage Usually, 20 life-threatening diseases are covered under this plan. If you are diagnosed with any of the covered diseases and meet the terms and conditions of the policy, you will receive a pre-decided lump-sum amount as claim settlement. This plan has a focused approach as it is designed to offer dedicated insurance coverage in case of a particular disease. Depending upon the policy’s terms, you can either receive a pre-decided lump-sum payment or the medical expenses of treating the disease can be indemnified (paid). In some cases, future premium payments can also be waived off.
Premium As this plan offers coverage against a wide range of diseases, the premium charged for it is comparatively higher than a Disease-specific Plan. As this plan offers coverage against only one specific disease, the premium charged for it is comparatively lower than a Critical Illness Plan.
Waiting period Usually, this plan has a waiting period of about 90 days. This means you will have to wait for 90 days after you buy the plan to raise a claim. Usually, you don’t have to wait to raise a claim against this plan as they have no waiting period.
Survival period A Critical Illness Plan comes with a survival period that can range between 0 to 30 days. This means you need to survive (after being diagnosed with the covered illness) for the number of days mentioned in the survival period to claim against the policy. In most cases, there is no survival period in the case of a Disease-specific Plan.
Common diseases that are covered Commonly, the following diseases are covered by a Critical Illness Plan: 1) Cancer, 2) Stroke, 3) Benign brain tumour, 4) Coronary artery bypass and 5) Paralysis. More diseases can also be covered under this policy. Commonly, one of the following diseases is covered by a Disease-specific Plan: 1) Diabetes, 2) Kidney ailments, 3) Dengue, 4) Hypertension and 5) Cardiac ailments. The plan is not restricted to the above-mentioned diseases.
Who should buy it? You should buy this cover if you want to enhance your health insurance coverage. Treating a Critical Illness can be difficult on the wallet. Thus, a dedicated plan that covers a wide variety of life-threatening diseases, over and above your health insurance cover, should be helpful to manage your finances in such challenging times. You should buy this cover if you have a family history of a particular disease; for example, diabetes. Also, such a cover can be purchased as a financial safety measure against the presence of a specific disease in and around your locality/city; for example, dengue.

Note that the details mentioned above are generic. Exact details will vary depending upon the precise health insurance policy chosen by you. All the details shall be mentioned in the Policy Wordings of your chosen cover.

Which cover to buy?

There isn’t a standard answer to this question. You need to understand your health insurance requirements and buy a cover that meets those needs. Here are a few combinations (combo) to help you with your purchase decision.

Combo 1

Individual Health Insurance Plan (sum insured more than Rs. 10 lakhs) + Disease-specific Plan.

Here, the Individual Plan can help in case of being diagnosed with a critical illness. However, if there’s a family history with regard to an illness or a looming threat of the disease in your vicinity, then opting for a Disease-specific Plan is a must to reduce the pressure on the Individual Plan.

Combo 2

Individual Health Insurance Plan (sum insured less than Rs. 5 lakhs) + Critical Illness Plan + Disease-specific Plan.

Here, as the sum insured of the Individual Plan is on the lower side, it becomes crucial to have a Critical Illness Plan to have close-to adequate health insurance coverage. In addition, a Disease-specific Plan should be purchased if there’s a need for it and to reduce pressure on the Individual Plan.

While these are basic combinations, there can be others featuring your employer-offered Group Medical Cover, Family Floater Plan, and a Top-up Plan as well. You should also keep in mind the premium associated with these plans. It helps to have a budget in mind and shop for a plan, or plans, that offer value for money (in terms of insurance coverage and services) along with covering financial risks associated with health issues.

Frequently Asked Questions

Read ahead to know the answers to some commonly asked queries surrounding Critical Illness and Disease-specific Plans.

Is it okay if I don’t buy any other health cover apart from a Critical Illness Plan as it covers different types of illnesses?

A Critical Illness Plan will only come into the picture if you are diagnosed with the covered diseases. It is a one-time lump-sum benefit. Unlike a wide-ranging health policy, it does not offer a sum insured for multiple claims. Without any other health coverage, you will be exposed to financial losses in case of medical emergencies like accidents or hospitalisation due to medical issues that are not related to a critical illness. Therefore, a Critical Illness Plan is considered as an add-on and not as a standalone cover. However, it can be purchased as a standalone cover if needed.

Can I purchase two Critical Illness Plans?

Purchasing two Critical Illness Plans would be counterproductive unless both plans cover different sets of illnesses, which is unlikely. Instead, you should consider increasing the sum assured of the Critical Illness Plan or look for a Disease-specific Plan as a companion to the Critical Illness Plan.

Is a Disease-specific Plan enough, considering I reside in a tier 2 city?

A Disease-specific Plan is usually purchased in case of a family history of an illness or as insurance against a widespread disease. As it will not cover you against hospitalisation in case of a variety of reasons, it is not considered enough. Since you reside in a tier 2 city, you can pick a policy as per the average medical costs in your city.

Can I purchase Critical Illness cover online?

Yes, a Critical Illness cover can be purchased online.

Are there any COVID-focussed policies?

Corona Kavach and Corona Rakshak are two COVID-focussed policies.

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