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

Mediclaim or hospitalisation plans are the most basic type of health insurance plans. 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 can cover the entire family up to a certain limit.

A top up plan increases the insurance coverage over and above your existing base policy at a comparatively lower cost as compared to increasing the sum assured in the base policy. The top-up plan will come to your rescue in case your medical insurance claim crosses a threshold limit (also known as a deductible).

A good idea is to have a top-up health policy as an additional coverage over and above an existing individual plan or a mediclaim from the employer. It will reimburse expenditure which arises out of single illness beyond the limit of the existing cover.

In top-up plans there are two concepts – Top-up and Super top-up. You have to be clear as to which policy you are seeking and know exactly how both these concepts operate. Else, you shall be in for a nasty surprise when a hospitalization claim has to be settled.

Our hectic lifestyles make us vulnerable to various serious diseases, which can strike at any age. One such illness that has become a significant concern for our country is cancer. As per the National Institute of Cancer Prevention and Research (NICPR), about 2.25 million Indians live with cancer and over 11 lakh new patients get registered every year. Ironically, cancer care is expensive, creating financial hardships for a family.

Staying financially ready by investing in a cancer insurance policy early on is a wise decision to tackle life’s uncertainties. Opting for a cancer cover could prove to be of solid financial support when incurring hefty medical bills due to this dreaded disease.

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 in critical illness covers are not made on actual expenses incurred. Under this condition the cover gives the flexibility to use the monies for changing lifestyle and medicines. Also it's a substitute for income for the time you could not resume work due to illness. Payout under these plans are made on the diagnosis of the disease for which the original medical bills may not be required as a part of claim settlement.

Health Insurance is broadly classified under reimbursement and benefit plans. Reimbursement plans pay for all expenses actually incurred, after an insurable event has happened, as per policy conditions. While, benefit plans pay claims on occurrence of the insurable event based on a pre-agreed formulae in the policy.

Interestingly, benefit plans do not link expenses incurred to the claim settlement. Hence, if you go for benefit plans over and above the basic insurance health plans it is possible to have two claim settlements form each of the policies for a single incident.

Reimbursement plans and benefit plans as a combination at times can create a unique value proposition for a family in financial distress caused by a sudden health calamity that may be faced by them.