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Types of Health Insurance Covers


A health insurance cover is the primary Medicare need for people. With the rapidly inflating costs for treatment, a health insurance policy acts as a lifeline when you fall ill.

Health insurance policies come in several forms, and each fulfills a different function of financial aid. A composite health cover will consist of one or more of these policies, so that you are protected thoroughly against financial risk caused by an illness or accident. It is important to know about types of health covers, so that you can choose the ones that best suit your needs and lifestyle.

Here, we describe the basic types of health insurance covers and how they can help you.

Hospitalization Cover

Hospitalization cover provides you a cover for all the expenses arising out of hospitalization on account of treatment required for illness or accident. This is an indemnity cover, which ensures, making good for the loss an insured suffers. All the expenses are paid based on the details mentioned on required bills and hospital documents. Each cover comes with its own coverage, exclusion and limitations.

For example, expenses incurred for hospitalization for maternity may or may not be covered and ambulance charges covered may be different under different company policy. This is a must-have health insurance cover for everyone, especially with rising healthcare costs. It serves as a financial security against hospitalization expenses.

Hospital Cash Cover

Hospital cash cover takes care of those expenses which are not covered under a pure hospitalization cover. Though hospitalization cover takes care of medical expenses, there are also incidental expenses which are non-medical in nature. For example, expenses arising out of traveling to and from the hospital, attendants’ fees or stay, special dietary food expense which can also cause a hole in the pocket, especially during extended period of hospitalization.

This cover, however, is not to be substituted with a hospitalization cover. This cover supplements the hospitalization cover. One can choose a daily allowance from Rs. 500/- to Rs. 2500/- for a prefixed number of days and for a reasonable premium amount.

Critical Illness Cover

Critical illness policy covers you for any grave or critical illness (such as cancer, paralysis, major organ transplant etc.) for which hospitalization expenses may or may not be covered in a pure hospitalization cover. Some serious illnesses may require prolonged recovery which entails additional costs such as incidental expenses, possible loss of income, structural changes in the family, changes in lifestyle, depletion of savings etc.

In such cases, critical illness cover is most suited, as this is a benefit cover, which means, a lump sum amount (the opted cover) is paid on diagnosis (if permissible) of the illness, even before the treatment starts. This is unlike hospitalization cover (indemnity cover) – where one gets paid during or after the treatment.

Personal Accident Cover

Personal accident policy covers you for expenses incurred only on account of accident. This is a benefit plan, where the opted cover is paid as a lump sum based on the degree of disability and/or death. Some major accidents may require prolonged recovery which entails additional costs such as incidental expenses, possible loss of income or job, changes in lifestyle, depletion of savings etc.

A personal accident cover is most suited for such cases.

Top-up Cover

A top-up health cover is an extension over your existing health/hospitalization policy. This policy can be taken as an add-on cover to your existing hospitalization policy. In case of higher expenses due to illness or accidents when the existing policy sum insured gets exhausted, a top-up cover takes care of the additional expenses.

This policy has a deductible which is usually the sum insured in the insured’s existing hospitalization policy. The top-up cover will be triggered once the deductible amount gets used up for hospitalization expense.

Those who do not have any existing hospitalization cover can also opt for this policy. The expenses up to the deductible limit (per hospitalization) have to be borne by the member. This limit would be as per the plan you have opted in the top-up cover. For example: you have a health insurance policy with 3 lakh sum insured, then 3 lakh would be the deductible limit. The top-up policy would be triggered when this 3 lakh would get exhausted.


Protect yourself from the financial pitfalls of an unforeseen illness. Choose from our range of health insurance covers here.

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Published on:17 May, 2013

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