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

Types of Health Insurance

There are two basic types of health insurance:

1. Mediclaim Plans
Mediclaim or hospitalization plans are the most basic type of health insurance plan. They cover the cost of treatment when you are admitted to 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 a change in lifestyle. Unlike hospitalization plans, the payout is made on Critical Illness cover chosen by the customer and not on actual expenses incurred in the hospital. The cover gives the flexibility to use the monies for changing lifestyles and medicines. Also, it's a substitute for income for the time you could not resume work due to illness. Payouts under these plans are made on the diagnosis of the disease for which the original medical bills are not required.