You should know the difference between the two basic categories of health insurance and which one is appropriate for you. Here are some basic differences:

Health policies Sold by GENERAL Insurance Companies
Health policies Sold by LIFE Insurance Companies
The expenses incurred due to hospitalization like room charges, surgery, medicines, etc. are reimbursed (or) paid directly by the insurance company (in case of cashless benefit) Fixed amount is paid as per policy, regardless of the expenses incurred. The actual expenses may be more or less.
If you have more than one health insurance, then the claim, if any, is paid by sharing between such insurances You can claim even if you have already claimed from health insurance with a general insurance company
The premium has to be paid first in one payment to get cover for the year The premium can be paid as monthly, quarterly, or annual basis
Need to wait 30 days before any claim can be made Need to wait 90 days before any claim can be made
Premium differs from one year to the next depending on claim during current year Premium is generally fixed for three years - after that, it may change
The policy term is mostly for one year The policy term is generally for longer duration, 10 years or even 15 years
Cannot return the policy after purchasing it You can return the policy within 15 days if you decide that you do not want the policy
There is no life insurance benefit or maturity benefit There may be life insurance component and may or may not have maturity benefit

Both kinds of health policies have:
  • Medical check requirement
  • Waiting period for various diseases
  • Exclusions
  • Maximum payable amount applicable
So, how do you know which policy you should purchase?

Here is what we recommend:

If your company already provides health insurance cover, then you can purchase health policies sold by Life insurance companies. If you are hospitalized, your company's medical policy will cover the expenses. Over and above that, you can still legally file a claim under the health policy that you have from life insurance companies.

Many times, when we are hospitalized, there are many expenses like caretaker's food, transportation, hospital administrative costs, etc. that the health insurance under General Insurance would not cover. If you have a health policy from Life insurance, you can make claim against this so that you can get fixed amount of cash which would help you to meet those additional expenses.