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Difference Between Health Insurance And Mediclaim
Securing health and money has become crucial for people in today's fast-paced world due to the rising expenses of medical care and a rising number of lifestyle disorders. Two well-liked choices that offer financial security against medical costs are health insurance and mediclaim coverage. ...Read More
What is a Mediclaim Policy?
Table of Content
1. Benefits of Mediclaim Policy
2. What is a Health Insurance Policy?
3. Benefits of Health Insurance Policy
4. The Importance of Health Insurance Coverage
5. Mediclaim vs Health Insurance
6. Is health insurance the same as medical insurance?
7. Why should you get a health insurance plan?
8. How to Select a Medical Coverage Plan?
9. Important Considerations before Purchasing a Mediclaim/ Health Insurance Plan in India
10. Is It Better to Purchase a Mediclaim Policy or Health Insurance in India?
11. Summary
12. FAQs on the Difference Between Health Insurance and Mediclaim
A mediclaim policy is a type of health insurance plan that mainly covers hospitalisation costs. It is intended to cover the medical expenses of the policyholder when they are admitted to the hospital due to an illness, accident, or injury. Mediclaim policies are usually simple and concentrate on covering particular medical procedures and treatments.
Some key features of a medical policy include:
Hospitalisation coverage covers in-patient hospitalisation expenditures, such as room rent, physician fees, and surgical charges.
The maximum amount that the insurer will pay for medical bills is known as the pre-defined sum insured.
Cashless treatments are offered at network hospitals tied to the insurance provider.
Typically provided for a year, it is a short-term coverage that has to be renewed.
For those looking for inexpensive and basic coverage, mediclaim policies are the best options. Insurance providers might not, however, pay for acute diseases, preventative care, or outpatient treatment in this policy.
Benefits of Mediclaim Policy
To understand mediclaim vs health insurance in a detailed manner, you need to first understand the benefits of getting a mediclaim policy. Here is a list of advantages that this policy holds:
Health Cover
By paying for hospital expenses, mediclaim insurance gives policyholders crucial financial security by preventing them from exhausting their resources in the event of an emergency. These insurance companies pay medical expenses up to the insured amount because they are indemnity-based.
For instance, if your insurance has a coverage maximum of Rs. 3 lakh and you have surgery that costs Rs. 2 lakh, the insurer would pay the whole Rs. 2 lakh, lowering your out-of-pocket expenditures. This option offers much-needed financial assistance during difficult times and is especially helpful in situations of unexpected hospitalisations brought on by illness or accidents.
Easy Claim Settlement
The majority of mediclaim insurance guarantees that policyholders obtain prompt financial aid through a simplified and easy claim settlement process. Cashless claim facilities remove the requirement for upfront payments by enabling direct payment between the hospital and the insurer when the patient is treated at a network hospital.
Also, policyholders must submit pertinent medical bills for reimbursement of claims to be processed and settled. Mediclaim plans are a dependable support system during medical emergencies because of the simplicity of claim settlement, which guarantees that families will not face significant financial hardship. A lot of insurance companies additionally provide round-the-clock support to enable speedy and effective claim handling.
Family Cover Available
Mediclaim policies frequently allow family members to be covered under a single plan, increasing the affordability and accessibility of healthcare. Members, such as parents, spouses, and kids, can split the covered amount under a family floater insurance. For instance, each insured member may use the Rs. 5 lakh coverage offered by a family floater mediclaim policy as needed.
This option guarantees that every member of the family is covered against hospitalisation expenses and is more affordable than purchasing individual plans. Families looking for financial stability against unanticipated medical situations will find it to be the perfect option.
Tax Savings
Mediclaim policies give tax benefits under Section 80D of the Income Tax Act, 19611, in addition to cash protection. Up to Rs. 25,000 in annual deductions are available to policyholders for premiums paid for their wives, kids, and themselves. The deduction limit rises to Rs. 50,000 if the cover includes elderly parents.
Moreover, mediclaim is a wise financial decision because of this tax-saving benefit, which enables people to lower their taxable income while maintaining healthcare protection. These plans also aid in the development of a disciplined strategy for effectively controlling medical costs, helping them to save and have a health investment.
What is a Health Insurance Policy?
An extensive type of medical coverage that extends beyond hospital costs is a health insurance policy. It is intended to offer policyholders financial security against a range of medical expenses, guaranteeing their adequate coverage during medical emergencies. Health insurance policies provide a wider range of benefits, including pre-and post-hospitalisation expenses, outpatient treatments, severe diseases, and even preventive healthcare services, in comparison to mediclaim, which only covers hospitalisation costs.
Some key features of a health insurance policy include:
Health insurance includes complete coverage for diagnostic tests, hospital stays, nursery charges, ambulance fees, and more.
This type of policy provides policyholders with alternatives for larger amounts insured, enabling them to select coverage according to their needs.
Policies are offered for longer periods of time (two or more years), which minimises the inconvenience of renewal.
Additional benefits might include fitness initiatives, maternity costs, coverage for severe illnesses, and yearly physicals.
Overall, a health insurance plan is a vital financial safety net for people and families as it guarantees extensive medical protection.
Benefits of Health Insurance Policy
Even though mediclaim and health insurance sound similar, the benefits of a health insurance policy are much broader. The following are the advantages of purchasing a health insurance policy:
Extensive Coverage
Health insurance policies offer a wide range of coverage, guaranteeing financial stability against a range of medical costs outside of hospital stays. They pay for diagnostic testing, outpatient care, pre-and post-hospitalization expenses, and even domiciliary care.
For instance, extensive health insurance coverage will pay for both hospitalisation and outpatient chemotherapy treatments if a patient needs chemotherapy for cancer treatment. A Mediclaim policy, on the other hand, usually solely pays for hospital stays, which makes health insurance a more advantageous and inclusive choice.
Tax Benefits
Section 80D of the Income Tax Act allows for tax deductions on health insurance premiums, which lessens the financial burden on policyholders. Up to Rs. 25,000 can be claimed by individuals for themselves, and an extra Rs. 50,000 can be claimed if they include senior citizen parents in the plan.
Since it lowers taxable income while also offering medical protection, health insurance is a dual-benefit investment. People are encouraged to obtain sufficient health care for their families by these tax benefits.
Discount on Policy Renewal
Policyholders who maintain their health and renew their insurance without filing claims are often rewarded by their insurers. Discounts on renewal premiums or no-claim bonuses (NCB) are used to accomplish this.
For example, insurers may provide a reduction on renewal rates or raise the sum insured at no extra cost if a policyholder does not submit any claims during a specific year. This encourages people to maintain their health, have regular checkups, and keep their insurance coverage intact.
Availability of Riders
Riders, which offer extra protection above and beyond the standard policy, give health insurance policies the option to improve coverage. Maternity benefits, personal accident insurance, and critical illness insurance are examples of common riders.
A policyholder who chooses a critical illness rider, for example, will get a lump sum payment if they are found to have a serious condition, such as cancer or a heart attack. This financial assistance aids in the management of recovery-related medical costs, income loss, and lifestyle modifications.
The Importance of Health Insurance Coverage
Before we proceed to understand the difference between health insurance and medical insurance, it is important for us to analyse the significance of health insurance coverage. To guarantee both access to high-quality treatment and financial stability, health insurance is essential.
Unexpected medical emergencies might result in high costs that put a burden on your finances. The financial strain on people and families is lessened by extensive health insurance coverage, which helps cover hospitalisation charges, medical consultations, diagnostic tests, pre- and post-hospitalization expenses, and even critical illnesses.
In addition to providing financial security, health insurance encourages preventative treatment by paying for wellness initiatives and routine checkups. This motivates people to keep an eye on their health and identify any problems early, which improves long-term health outcomes and allows for prompt medical action.
Also, claim settlement is another crucial component of health insurance that affects how well an insurer handles claims. The percentage of claims that an insurer settles relative to the total number of claims received is known as the claim settlement ratio or CSR. A greater CSR shows how consistently a business honours claims and makes sure policyholders get money when they need it. In the Indian health insurance market, an incurred claim ratio (ICR) of 80% to 100% is seen as favourable.
Mediclaim vs Health Insurance
Understanding the difference between health insurance and mediclaim is crucial for selecting the appropriate coverage for your healthcare needs. Below is a comparative table highlighting the key differences between these two types of insurance:
Parameter |
Mediclaim |
Health Insurance |
Scope of Coverage |
Provides coverage primarily for hospitalization expenses due to specific illnesses or accidents, up to a predefined sum insured. |
Offers comprehensive coverage, including hospitalization, pre- and post-hospitalization expenses, outpatient care, diagnostics, maternity benefits, preventive care, and more. |
Policy Term |
Typically available as an annual policy that requires regular renewal. |
Can be availed as both annual and long-term policies, providing continuous coverage over extended periods. |
Premiums |
Generally more affordable due to limited coverage. |
Higher premiums correspond to the extensive coverage offered. |
Claim Process |
Involves reimbursement; the insured pays medical bills upfront and later claims a refund from the insurer. |
Facilitates cashless claims, where the insurer directly settles medical bills with the healthcare provider, minimizing out-of-pocket expenses. |
Sum Insured |
Offers lower sum insured options, often not exceeding Rs. 5 lakhs. |
Provides higher sum insured options, with coverage limits that can go up to Rs. 6 crores per year. |
Pre-existing Conditions |
May have waiting periods or exclusions for pre-existing conditions. |
Often includes coverage for pre-existing conditions after a specified waiting period. |
Policy Flexibility |
Less flexibility in customizing coverage; typically offers standard features without optional add-ons. |
Greater flexibility, allowing customization through various riders and add-ons to enhance coverage as per individual needs. |
Additional Benefits |
Limited additional benefits; primarily focuses on hospitalization expenses. |
Offers a wide array of additional benefits, including critical illness coverage, maternity expenses, wellness programs, and preventive care services. |
Is health insurance the same as medical insurance?
Mediclaim and health insurance are often used interchangeably, but they are not exactly the same. Medical insurance, commonly referred to as Mediclaim, is a more limited form of health coverage that primarily focuses on hospitalization expenses due to illnesses or accidents. It usually does not cover acute diseases, preventive care, or outpatient care, but it does pay or immediately settle hospital expenditures up to the covered amount.
On the contrary, health insurance is a more extensive and all-encompassing form of coverage. In addition to hospitalisation, it covers pre- and post-hospitalization expenses, ambulancecharges, daycare services, outpatient department consultations, diagnostic testing, maternity benefits, and even coverage for serious illnesses. Additionally, some policies include wellness initiatives and free yearly health examinations as preventive healthcare services.
One key health insurance vs medical insurance is the sum insured. While health insurance plans provide larger sum insured possibilities (up to Rs. 6 crores), medical insurance policies typically give lesser coverage limits (Rs. 2–5 lakhs). Furthermore, health insurance is more versatile since it may be customised with add-ons** like daily hospital cash benefits, critical illness riders, and personal accident coverage.
Why should you get a health insurance plan?
Access to high-quality healthcare and financial stability depends on having health insurance coverage. Unexpected medical crises can result in expensive hospital stays and treatment. Extensive health insurance coverage lessens the financial strain on people and families by covering hospitalization, pre- and post-hospitalization expenses, ambulance fees, outpatient department appointments, acute diseases, and maternity benefits.
Furthermore, by paying for wellness initiatives and yearly physicals, health insurance encourages preventative care and guarantees early identification of health problems. Additionally, it eliminates the need for upfront payments by offering cashless care at network hospitals.
Under Section 80D of the Income Tax Act1, health insurance provides tax benefits that enable policyholders to reduce their taxes. With rising medical inflation, investing in a health insurance plan ensures long-term financial protection, peace of mind, and access to quality healthcare without financial strain.
How to Select a Medical Coverage Plan?
Now that you have an idea about mediclaim vs health insurance, read the pointers below to understand how to select a medical coverage plan:
Choose the Right Amount of Coverage
To provide sufficient financial protection in the event of a medical emergency, choosing a suitable sum covered is essential. Analyse variables including your age, medical inflation, and family medical history. Choosing a bigger sum insured (such as Rs. 10 –20 lakhs) is advised if you live in a large city where healthcare expenses are much higher. To guarantee you do not have to pay out of cash in an emergency, complete coverage should cover hospitalisation, daycare treatments, acute diseases, and post-hospitalization expenses.
Make Sure It Fits Your Budget
The ideal balance between affordability and coverage should be provided by health insurance. Evaluate policy benefits, exclusions, and rates to determine which plan best suits your budget. Monthly EMI choices are offered by many insurers, which makes it simpler to purchase full coverage without experiencing financial hardship. Selecting the appropriate premium guarantees the viability of the policy over the long run, free from frequent cancellations brought on by financial difficulties.
Purchase Health Insurance Online
Online health insurance purchases provide cost savings, transparency, and convenience. You may examine the claim settlement ratio of insurers to verify their dependability, read customer reviews, and compare many plans using online platforms. Online purchases can also have no paperwork and discounts, which speeds up and simplifies the procedure. Before making a purchase, always confirm the policy specifics.
Important Considerations before Purchasing a Mediclaim/ Health Insurance Plan in India
Once you are aware of the difference between health insurance and mediclaim, it is time to understand the factors to consider before purchasing a mediclaim or health insurance policy. Read the pointers below to know:
Extent of Coverage
Look for a plan that covers not just hospitalization but also pre- and post-hospitalization expenses, outpatient consultations, diagnostics, critical illness treatment, and preventive healthcare. A wider coverage ensures financial protection against various medical scenarios.
Family Needs
If you want to cover your spouse, children, or dependent parents, opt for a family floater plan instead of individual policies. This provides cost-effective coverage for the entire family under a single sum insured.
Premium Costs
Compare premium amounts across insurers and assess whether they align with the coverage provided. A low premium may mean fewer benefits, so balance affordability with adequate coverage according to the type of health insurance / mediclaim you get.
Cashless Services
Choose an insurer with a vast network of hospitals offering cashless treatment to avoid out-of-pocket expenses during medical emergencies.
Critical Illness Coverage
If you have a family history of critical illnesses like cancer or heart disease, select a plan with critical illness cover to receive lump sum benefits for costly treatments.
Tax Benefits
Ensure the plan is eligible for tax deductions under Section 80D of the Income Tax Act1, allowing savings on taxable income.
Future Healthcare Needs
Consider long-term requirements, such as maternity benefits, senior citizen plans, or lifestyle disease coverage, to ensure ongoing financial security.
Is It Better to Purchase a Mediclaim Policy or Health Insurance in India?
Depending on your unique circumstances, you can choose between health insurance and mediclaim coverage. Mediclaim policy can be enough if you are looking for limited coverage at a reduced cost. A health insurance plan is a preferable choice, though, if you want extensive protection along with other perks.
Young people without any pre-existing diseases, for instance, may choose a mediclaim policy, whereas families or people with long-term illnesses might gain more from a health insurance plan.
Summary
Understanding the differences between health insurance, Mediclaim, and life insurance is crucial for selecting the right coverage plan. While Mediclaim policies offer basic hospitalization coverage, health insurance provides extensive protection against a wide range of medical expenses. On the other hand, life insurance ensures financial security for your loved ones in case of your untimely demise. Assess your healthcare needs, budget, and future requirements to make an informed decision about the best combination of these insurance plans.
FAQs on the Difference Between Health Insurance and Mediclaim
Q: What is the difference between medical policy and health insurance?
A medical policy, such as Mediclaim, covers hospitalization expenses, while health insurance offers broader coverage, including outpatient care, critical illnesses, and preventive treatments.
Q: Which is better, medical or health insurance?
Health insurance is generally better due to its extensive coverage, but the choice depends on your specific needs and budget.
Q: What is the meaning of health or medical insurance?
Health or medical insurance refers to a financial product that covers medical expenses incurred due to illness, injury, or hospitalization.
Q: How many types of health insurance are there?
There are several types of health insurance, including individual plans, family floater plans, critical illness plans, and senior citizen plans.
Q: How can I claim my health insurance?
You can claim health insurance by submitting the required documents to your insurer, either for reimbursement or cashless treatment at network hospitals.
Related Articles
Regular vs Senior Citizen Health Plan - Which is Better?
Individual Health Insurance Vs Family Floater Mediclaim - Which is Better
Understanding Cancer Insurance, Critical Illness Coverage & Health Insurance
Difference between Active Immunity and Passive Immunity
References
https://www.hdfclife.com/health-insurance-plans/benefits-of-health-insurance
https://www.hdfclife.com/health-insurance-plans/health-insurance-claim-settlement-ratio
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Francis Rodrigues
Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.
Written By:
Vishal Subharwal
Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.
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1. Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions. Tax Laws are subject to change from time to time. Customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.
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@ Annual Premium amount ₹ 1869 for Male aged 35 years, Base Benefit, 10 years term, Regular Pay option, Sum Assured=10 lakhs, excluding Taxes & levies as applicable.
ARN- ED/02/25/20997