What it is
Health insurance, in the words of the insurance regulator IRDAI’s policyholder portal, is a type of insurance that essentially covers your medical expenses. It is a contract between an insurer and a person or a group.
Under that contract, the insurer agrees to provide specified health cover at a particular premium, which is the price you pay for the cover. All of this is subject to the terms and conditions set out in the policy.
Critical illness insurance is usually sold as a separate product, and the regulator pages we draw on here do not define it. So the safest way to tell it apart from an ordinary health policy is to read what each policy document says it will pay for, and when.
How it works
Any health policy, whatever its name, rests on the same basics: who is covered, what is covered, how much the insurer will pay, and what you pay in premium. Those details are written in the policy and they decide your claim, not the product label.
This is why two policies with similar names can behave differently. The policy wording is the contract, and the cover is limited to what that wording specifies.
For more on the basic idea, see our explainer on health insurance.
What it means for you
When you compare a standard health policy with a critical illness plan, check the same things in each document:
- What triggers a payout: medical expenses you incur, or something else the policy names.
- What is covered and what is not: the conditions, treatments and situations listed in the terms.
- The premium: what you pay and for how long.
- Who is covered: you alone, or a group or family.
Ask the insurer or your advisor to point to the exact clause for each answer. Because cover depends on the terms and conditions, a verbal summary is not a substitute for the written policy.
Having one kind of cover does not automatically replace the other. Whether you need either depends on what your existing policy says.
Common mistakes to avoid
- Assuming a policy covers something because of its name, without reading the terms.
- Comparing premiums alone and ignoring what the cover actually includes.
- Skipping the policy document after purchase, when the contract is the document that governs any claim.
