What is better- Health Insurance or Mediclaim Policy?

Health Insurance and Mediclaim are two terms that often confuse many individuals. Many of us may feel that the two are synonyms and offer the same features, but in reality, that is not true. Both these policies focus on reducing the financial burden from the shoulder of the policyholder in case of medical emergencies. But the two differ in terms of features and benefits. This article will help you understand the difference between Health insurance policy and Mediclaim policy and assist you in choosing the better option.

Mediclaim plans are a type of health insurance plans, but the reverse is not true. Health Insurance policies are an innovative way of arranging for medical corpus required at the time of medical treatment and medical emergency. Health insurance plans are more comprehensive in nature as compared to the Mediclaim Policy.

What is covered under health insurance plans?

Health insurance policies offer wider coverage towards covering medical expenses. Following are the features and benefits of the health insurance plan:

• A Health insurance plan offers comprehensive coverage against medical expenses incurred during medical treatment.
• The health insurance plan offers a higher degree of expense coverage involved in medical treatment. You can widen the scope of the health insurance policy by including a critical illness rider in order to cover for the expenses of more than 30 critical illnesses mentioned, apart from the coverage offered under the basic health insurance plan.
• In case you want to lower your health insurance premium amount, you can avail the co-payment facility wherein you pay a certain percentage of treatment expense and the rest of the bill is paid by the health insurance provider company.
• The policyholder can avail tax benefit under Section 80D of the Income Tax Act, 1961

Above are the primary features and benefits of the plan. As mentioned earlier that health insurance plan is a comprehensive cover, here is a list of procedures that are covered under the policy:

• Covers pre-hospitalization expense
• Covers post-hospitalization expense
• Covers Maternity expenses
• Covers expenses incurred for day care procedures like cataract, dialysis, etc.
• Offers to cover for the expenses related to pre-existing medical conditions after completing a waiting period of 3 years
• Cashless hospitalization for treatment undertaken at the network hospitals
• Covers for the expenses of ambulance service
• Co-payment facility available
• Offers ‘No Claim Bonus’ in case of renewal

What are the types of health insurance policy & its importance?

The health insurance policy is broadly differentiated under 2 categories namely:

• Indemnity Plans:

  • Indemnity means protection against loss. So, indemnity health plans refer to any health insurance plan which provides financial assistance for any medical emergencies.

  • Traditional health insurance plans cover the expenses of treatment and hospitalization. Following are the type of indemnity plans:

• Mediclaim Plan

• Individual health insurance plan
• Family Floater health insurance plan
• Senior Citizen Health Insurance Plan

• Group Mediclaim Plan

• Defined Benefit Plan:

This plan is different than the indemnity plans as they are designed to provide financial assistance in the event of detection of illness or cover for the expenses incurred for the treatment of specified illness.

Following are the types of defined benefit plan:

• Critical Illness Plan
• Personal Accident Plan
• Hospitalization Cash Benefit Plan

Thus, the categories define the benefits offered by each type of health insurance plan, therefore, it is important to understand personal health insurance needs and avail the plan accordingly.

Why is the Mediclaim Policy necessary?

Mediclaim policy is a type of health insurance plan which focuses on offering coverage for hospitalization expenses and treatment cost.

The amount of the Mediclaim policy is pre-defined and can be availed for self, spouse or children. Tax benefits can be availed for the premium paid under Section 80D of the Income Tax Act. Following are the prime parameters that make buying Mediclaim policy necessary:

• Lower premium amount
• Offers cover for medical treatment
• Tax benefit on the premium paid

Health Insurance V/S Mediclaim: The difference between the two

Health insurance policy and Mediclaim policy are often considered similar. However, there certain distinctions. The following list points out the major difference between Health insurance and Mediclaim

• Scope of coverage

Mediclaim policy mainly offers to cover for the hospitalization expenses only. While, the health insurance policy not only offers to cover for the hospitalization expenses, it also provides cover for pre and post hospitalization expense, ambulance charges, compensation for loss of income, etc. as per the terms and conditions of the health insurance plan.

• Extent of coverage

Hospitalization cover offered under the Mediclaim policy is lesser as compared to the health insurance policy. The health insurance plan offers a higher and more extensive sum insured coverage to the policyholder, along with additional cover like critical illness coverage, personal accidental benefit, etc.

Also, Mediclaim plans are usually of a much lower sum insured as compared to health insurance plans in India.

• Minimum 24 hour hospitalization

To avail the benefits of a mediclaim policy, there is a necessary requirement of a minimum of 24-hour of hospitalization. However, for claiming the benefits of a health insurance plan, the same is not mandatory as in the case of day care treatment for cataract, angioplasty, etc.

• Cashless, Reimbursement or Fixed Benefit

  • Under mediclaim policy, the benefit i.e. hospitalization expense can either be reimbursed or can be paid directly to the network hospital i.e. cashless.

  • Similarly, under the health insurance plan, it can be reimbursed or paid directly to network hospital (cashless) or can be paid in a lump sum in the event of an eventuality.

Common aspects of Mediclaim and Health Insurance Plans in India:

• Tax Benefit U/S 80D : Premiums paid for both Mediclaim plans and health insurance plans have a tax benefit under Section 80D of the Income Tax Act, 1961.
• Cashless and reimbursement facility : Both Mediclaim plans and health insurance plans provide cashless as well as reimbursement claim facility.
• Hospitalization benefits : Both Mediclaim plans and health insurance plans pay for the hospitalization expenses of the insured.

How do these plans work in India?

• A health insurance plan is more comprehensive than a Mediclaim policy as it offers wider coverage. It covers medical treatment, hospitalization, pre and post hospitalization expense, critical illness, ambulance service, etc. Additionally, it also compensates for the loss of income in case of accidental death or disability. It provides add-on coverage like critical illness coverage, maternity coverage, accidental disability coverage, etc. These add-on coverage can be used to enhance your insurance safety net.

• Under a health insurance plan, the policyholder can make a claim until the sum assured limit exhausts. However, if a claim is registered for critical illness or accidental disability coverage, the sum assured is paid in a lump sum and the health insurance policy is terminated.

• On the other hand, a Mediclaim policy offers coverage towards expenses incurred for medical treatment and hospitalization. A pre-specified limit is sanctioned for the coverage of expenses related to medical treatment and assistance. There is no additional coverage facility in Mediclaim plans with limited sum insured. A policyholder can file a claim for expenses until the entire amount of sum assured is exhausted.

Conclusion

You need a plan according to your choice. Mediclaim policies are usually cheaper than comprehensive health insurance plans, but with larger coverage benefits. You can choose a plan according to your pockets and requirements!

Recommended Link: Difference between National Insurance Parivar Mediclaim and Mediclaim Policy