Different types of Insurance everyone should consider and why

In general parlance a health Insurance policy is referred to a policy where the cost of hospitalizations are reimbursed (or paid directly to the hospital) to the policy holder. “Mediclaim” is the popular parlance for such policies though the brand “mediclaim” was made popular by the 4 nationalized general insurance companies.
Life insurance policies on the other hand pays the claim amount to your family in the event of your death during the policy period. So this covers a completely different risk as compared to a health insurance policy.
There are another type of health insurance policy which is equally important though frequently neglected or confused with the above “mediclaim” policies. These are policies (called critical illness policies in local parlance) that will pay the full claim amount if the policy holder is afflicted by the covered serious diseases (such as cancer, stroke, paralysis, multiple schelerosis, etc. ) and survives for 15-30 days after diagnosis. This policy is different from the mediclaim policy as the claim amount is paid without any reference to the expenditure incurred at the time of hospitalization for treatment of the disease. The lump sum received is meant to provide a lump sum amount that can generate income for the policy holder as his income earning capability is seriously affected when he is afflicted by these critical illnesses. Hence the policy amount needs to be as much as the life insurance policy value if not higher. Most people are not even aware of these risks and where they are aware they are satisfied with a policy of a small sum of Rs. 3 lakhs/Rs. 5 lakhs which does not serve the purpose of providing a lump sum to replace the lost income.


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