What is Health Insurance?

Health insurance is a type of insurance that covers medical expenses that arise due to an illness. These expenses could be related to hospitalisation costs, cost of medicines or doctor consultation fees.

Types of Health Insurance

There are two basic types of health insurance:

  1. Mediclaim Plans

    Mediclaim or hospitalisation plans are the most basic type of health insurance plans. They cover the cost of treatment when you are admitted in the hospital. The payout is made on actual expenses incurred in the hospital by submitting original bills. Most of these plans cover the entire family up to a certain limit.
  2. Critical Illness Insurance Plans

    Critical Illness Insurance Plans cover specific life threatening diseases. These diseases could require prolonged treatment or even change in lifestyle. Unlike hospitalisation plans, the payout is made on Critical Illness cover chosen by the customer and not on actual expenses incurred in the hospital, thereby giving flexibility to use the monies for changing lifestyle, medicines and as a substitute for income for the time you could not resume work due to illness. Payout under these plans are made on diagnosis of the disease for which the original medical bills are not required.

Why do you need Health Insurance now?

No one plans to fall ill or get hurt, but a serious illness can strike anyone at any time. The cost of treating the illness can cause serious financial strain on the savings you have accumulated over time. This means that you might have to compromise on providing your child the best quality education or defaulting on your home loan payments. Today, the cost of medical treatment is continuously rising. For e.g. Herceptin, a cancer medicine costs approximately ₹ 1,10,000 for a vial of 440 mgs. Depending on the weight, a patient usually requires 17-19 bottles for treatment over the course of a year . That's ₹ 18 - 20 lakh just for the medicine^. Then add hospitalisation costs, doctor consultation fees, chemotherapy costs, etc. and your overall expenses could exceed ₹ 25 lakhs. These costs which are already very high are increasing every year. That is why most smart people have taken necessary precautions to insure their health as soon as possible.

Health insurance is a living benefit, where you would need monies at the time of dire need. One disease can drain out all the savings you have made for your children’s education, marriage, for buying a house or even retirement. You would not want your family’s dreams to get shattered just because of an illness, especially when you could have protected yourself from it financially. It is beneficial to take a health insurance policy when you are young and healthy . As you get older, not only does your premium increase, but you also stand a chance of being denied a health cover by the insurance company.

How to choose a good health insurance plan?

Anybody who has already bought a health insurance policy will tell you that buying one is one of the smartest financial decisions any earning individual can make. Now, that you have decided to buy a health insurance policy, you need to know how to select a good health insurance plan that will take care of all your needs. To make this decision easier for you here is a list of benefits any good health insurance plan should offer you:

  • Protection against a large number of critical illnesses
  • Flexibility to choose your health cover
  • No increase in premiums during the policy term even if your health condition changes
  • Long policy term that covers you even in your old age
  • Large hospital network so that you have easy access to medical treatment

Should I buy a Mediclaim plan or a Critical Illness Insurance plan?

A mediclaim plan will either reimburse all your hospitalisation expenses or settle the hospital bills via a cashless facility. A critical illness insurance plan will give you a lump sum payout on detection of a critical illness. You don’t have to be hospitalized for the same. If you are unable to work because of the illness, then you can use the amount as a substitute for your monthly income. You can even use the money to cover expenses for doctor visits, medicine purchases, medical tests or any other expense that might arise during this time. That is why you need both – a mediclaim plan to cover your hospitalisation expenses and a critical illness insurance plan to cover your loss of income & other expenses that arise because of an illness.

Key Benefits of ICICI Prudential Smart Health Cover with ICICI Pru iProtect Smart


Sum Assured will be paid out on Death of Life Assured or Diagnosis of Terminal Illness.
On diagnosis of permanent disability due to accident while the policy is in force, all future premiums are waived
Only medical documents confirming diagnosis need to be submitted.
No increase in premium as you grow older. The premium is fixed for the entire policy term.

Terms & Conditions

^Source: http://spicyip.com/2012/06/dealing-with-cost-of-cancer-treatment.html
This is designed from ICICI Pru iProtect Smart “Life and Health” option. It is not mandatory for you to purchase this option only. You have the choice of purchasing other options of the product as per your needs.
#The CI Benefit for Angioplasty is subject to a maximum of ₹ 5,00,000. On payment of Angioplasty, if the CI Benefit is more than ₹ 5,00,000 the policy will continue for other CIs with CI Benefit reduced by Angioplasty payout and correspondingly Life cover reduced by the same amount. The future premiums payable for the residual CI Benefit and correspondingly reduced Life Cover will reduce proportionately.
To know more about the illnesses covered, please refer to the leaflet. Only Doctor’s certificate confirming diagnosis to be submitted.
Tax benefits under the policy are subject to conditions under the provisions of the Income Tax Act, 1961. Applicable taxes will be charged extra as per prevailing rates. Tax laws are subject to amendments from time to time.
ICICI Prudential Life Insurance Company Limited. IRDAI Regn No. 105. CIN: U66010MH2000PLC127837. ADVT No: W/II/0975/2016-17. UIN: 105N151V02