Does the critical illness protection rider offered by insurers serve the same purpose as health insurance?
Mukund Pandit, Pune
No, the critical illness rider does not serve the purpose of a health insurance policy. This is because the rider, offered as an option with the policy, provides for a lump sum amount only in the event of detection of a critical illness. The amount may be equal to the sum assured on the base policy and is paid on the diagnosis of illness. The illnesses covered and the premiums vary across insurers. Some insurers exclude critical illnesses that may have been caused by pre-existing ailments. Also, few insurers terminate the base policy once a claim is made on the rider. Usually, the rider gets terminated if the critical illness is diagnosed to be terminal in nature. Health insurance does not work on the same principle. It provides for reimbursement of hospitalization expenses, irrespective of the illness suffered, subject to terms and conditions. The pre-existing diseases are, however, excluded from the scope of coverage of the health insurance policy as well.
