Health insurance: Sooner the better
It is, however, critical to have a sound understanding of the structure and the benefits of different health insurance products before investing. Health insurance plans can be broadly classified in two categories, namely, indemnity-based and benefits-based. Under an indemnity based plan the insured is paid the entire amount that he spends on medical treatment, provided it is equal to or less than the sum assured. Benefits based plans are mainly critical illness plans under which the insured can claim the entire sum assured for the treatment of a critical illness specified in the policy.
Indemnity (typically like a mediclaim) and critical illness plans serve two different purposes, and both must be included in the health insurance portfolio. Investing in mediclaim can prove extremely useful in case of minor ailments such as food poisoning or appendicitis, as all the hospital expenses including tests etc are taken care of by the insurer. However, they become futile in case the insured contracts a critical illness such as cancer which demands much larger expenses over long-term.
A critical illness (CI) plan can be extremely beneficial in this case as the lump sum received by
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