Health Insurance vs. Critical Illness vs. Cancer Insurance: Understanding the Difference

24-June-2021 |

Is cancer insurance the same as critical illness insurance?


As per the Economic Times, cancer affects around 10 lakh people every year and the disease is fatal for around 6-7 lakh people annually (Source- thought of being diagnosed with cancer is terrible. But we have to prepare for the financial worries that come along with health-related concerns. A good insurance cover can mitigate the financial risks associated with serious ailments. Although advancements in medical technology have enabled the effective detection and treatment of cancer, medical costs have been on the rise. Treating cancer has now become more expensive than ever, with no signs of costs coming down in the future.



Critical illness insurance and cancer insurance are both designed to ease the financial burden associated with life-threatening illnesses.


Critical illness benefit covers various serious ailments like heart disease, stroke, organ failure, and cancer. Critical illness insurance provides a lump-sum benefit and is a great supplement to your existing health insurance, term insurance, or savings insurance plan.

While health insurance covers only hospitalization expenses for serious ailments, critical illness benefit is a lump-sum amount you get on being diagnosed with a life-threatening condition. The funds from critical illness insurance can be used in any way you need. It can be used to cover your lost income, to cover the cost of rehabilitation (if any), and other miscellaneous expenses such as transport.


Cancer insurance is great supplemental insurance that can be used as a regular income plan to cover the costs associated with cancer treatment. The benefits from cancer insurance can be used to cover the cost of treatment, or they can be used as a regular income plan to offset lost income. A cancer insurance policy is most beneficial when purchased along with a standard health cover. All types of cancer at all stages (pre-stage, early-stage, and major-stage) are covered under cancer insurance.

Standard health insurance covers hospitalization costs, but cancer treatment is not just restricted to the hospital. Both treatment and rehabilitation can be expensive and long drawn, causing loss of income. Cancer insurance, in such cases, acts as a savings plan as you can use the coverage amount instead of touching your savings.


Critical illness insurance and cancer insurance are great supplemental coverages along with your standard health insurance plan. The main difference is that a critical illness benefit is a lump-sum amount to cover a host of serious ailments. On the other hand, cancer insurance covers all the costs directly and indirectly associated with treating all types of cancer. Cancer is usually covered in most critical illness plans, but these plans may not cover all types of cancer at different stages. A cancer insurance plan, on the other hand, is specially designed to cover the perils of being diagnosed with cancer.


Is it better to take critical illness cover or health insurance?


Health insurance has become an essential coverage, with medical expenses increasing year on year. Therefore, buying a health insurance policy is a must. It is not an either-or case, but critical illness insurance should ideally be purchased as supplemental coverage, along with your standard health insurance policy. Your health insurance policy covers all your hospitalization expenses and the costs of treating ailments. But critical illnesses may have serious repercussions even after hospitalization ends.


Critical illness benefits are important because the insurer pays a lump sum on diagnoses of a life-threatening illness mentioned in your policy document. This amount can be used to cover the expenses of rehabilitation and as a replacement for lost income. The funds from a critical illness policy can be used in any way you choose, which is a great addition to your standard health policy.


Critical illness insurance can also be purchased along with life insurance plans. Savings insurance plans, term insurance, and regular income plans offer critical illness benefits as a rider#. Saving insurance plans and regular income plans offer both death benefits and survival benefits. Opting for the critical illness benefit rider# ensures that the funds you accumulated for your future through a savings plan are secure.


Is cancer covered under critical illness insurance?


Most critical illness plans offer coverage for cancer. However, it is important to check the details of the policy you choose before you make a purchase decision. Policy details can be looked up online, learn about Tata AIA Life Insurance’s policy details. While most critical insurance policies cover cancer, they may not cover all types of cancer and all its stages.


Critical illness insurance plans usually tend to cover cancer, which is severe or terminal, and many types of cancer that are generally treatable may be excluded. Moreover, the critical insurance benefit is difficult if you have a pre-existing health condition. But cancer insurance covers you even if you have pre-existing ailments, excluding cancer.




Both critical illness insurance and cancer insurance are useful supplemental covers to have along with your health insurance policy. A critical illness policy offers a broad range of coverage for various life-threatening ailments. This type of cover can also be purchased as a rider# along with life insurance policies like savings plans, term plans, and regular income plans. While critical illnesses are designed to secure you financially from a host of different ailments, they may not cover all types of cancer.


Cancer insurance is specifically designed to protect you financially from the perils involved with cancer. Cancer treatments can be expensive and may take a long time, and loss of income is a common problem when dealing with cancer. A cancer insurance plan can act as a regular income plan that you can use based on your requirements when battling cancer. Cancer insurance also covers all types of cancer, irrespective of the stage you are in. Cancer is a real risk today, and securing yourself from its financial burden is a smart choice.


Cancer insurance and critical illness insurance are valuable add-ons to your standard health policy, as the payout from coverages can be used at your convenience to suit specific needs when seeking treatment for ailments. These add-ons enhance your health policy and help secure you from rising medical costs. It is important to look at every company’s offering for cancer insurance and critical illness benefits to make an informed purchase decision.


However, just a cancer insurance plan or a critical illness insurance plan would not do, a basic health insurance plan too is needed to provide yourself with overall protection against medical emergencies. Depending upon your needs, you could pick all or one of these helpful policies from our bouquet of healthcare offerings. To know more, visit Tata AIA.



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