By Sanjay Matai

Medical supplies and treatment are getting more expensive, everyday. And lifestyle diseases like heart attack, diabetes, cancer, etc, are a common occurrence too. So, you need to prepare yourself and your family for any unforeseen illnesses.

Two of a kind
There are two medical covers available to you -- Mediclaim Policy and Critical Illness Cover. But don't misunderstand them as alternative products, and make an either-or decision. There are a few basic differences between them but both are equally important.

Mediclaim policy
1. This covers pre and post hospitalisation expenses like room rent, operation theatre charges, doctors' fees, tests, medicines, etc, as per the terms of the policy.

2. It covers expenses incurred to cure your ailment.

Critical illness policy
1. When you are seriously ill -- say you have a heart attack -- you will have to skip work, which means you lose your salary. A critical illness rider would cover this loss of income.

2. In this case, the entire sum assured is paid to you as soon as certain 'pre-specified' diseases or conditions like heart attacks, cancer, diabetes, stroke, organ transplant, etc, are diagnosed. You don't have to worry about submitting a proof of expenses incurred, or to be incurred.

You need both policies!
This is beacuse they benefit different circumstances. Merely having a Critical Illness Policy is not enough because it covers only a few diseases. What happens if you are inflicted by a disease, which is not covered? Now, your mediclaim policy will come to the rescue. So, a separate mediclaim policy is a must.

Hot options

Critical Illness Policy:
You can shop for it like any other policy. You could also take it as a rider along with your Life Insurance Policy for an additional premium over and the above the normal premium. The latter comes with a few limitations:

1. The cover for a Critical Illness Rider is limited by the basic life cover of the policy. The term of the Rider is also same as that of the basic cover.

2. The Rider will be available for only one Critical Illness. That is, once a disease is diagnosed and the sum assured paid to you, the rider is not applicable anymore. Besides, the life cover policy is also no longer available.

The last word: a standalone policy is a better option.

Mediclaim:
1. Some mediclaim policies offer both 'cover + investment'. But these have certain limitations such as a limited number of hospitalisation days, high costs, provision for only defined benefits and not full reimbursement, etc. So, a simple mediclaim policy, which offers just a cover works better.

2. If you decide to opt for a simple mediclaim policy, a floater policy covering all family members under a single cover, works out cheaper. However, there's a risk: if more than one or two members fall ill within the same policy period, the cover may not be adequate enough to take care of all expenses. Think about this before you opt for a floater policy.

Once you have chosen the right policy for you, read the fine print -- especially what is excluded! Know and understand them, first, and avoid hassles later.

The author is an investment advisor and promoter of wealtharchitects.in. He can be reached at sanjay.matai@moneycontrol.com.

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