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Difference Between Mediclaim And Health Insurance

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Difference Between Mediclaim And Health Insurance
July 08, 2024

Table of Content

 

Mediclaim and health insurance are commonly used terms in the insurance industry, and many people often confuse them to be the same. While they both refer to insurance policies providing coverage for medical expenses, there are significant differences between them. In this article, we will discuss mediclaim vs health insurance and their respective benefits, helping you make an informed decision about which one suits your needs better.

What Is a Mediclaim Insurance Policy?

A Mediclaim insurance policy serves as a financial safety net during hospitalisation due to illness or injury. It is primarily designed to reimburse the medical expenses up to the sum insured. It reimburses the policyholder for medical expenses incurred during the hospital stay, including room charges, doctor fees, medications, and other sanctioned costs. 

While Mediclaim offers valuable coverage, it's important to understand that it typically focuses on in-patient care. For a more comprehensive health insurance plan that may encompass pre and post-hospitalisation expenses, outpatient consultations, and preventive care, a broader health insurance policy might be more suitable.

Benefits of Mediclaim Insurance Policy 

The benefits of a mediclaim insurance policy are listed below:

  • Financial Protection: A mediclaim insurance policy offers financial protection by covering the cost of hospitalisation, surgeries, and medical treatments. This ensures that you don't have to bear the financial burden of hefty medical bills.

  • Cashless Hospitalisation: Most mediclaim policies provide the facility of cashless hospitalisation. It means that you can avail treatment at network hospitals without paying any upfront fees. The insurer directly settles the bills with the hospital.

  • Pre and Post-Hospitalisation Expenses: Mediclaim policies typically cover pre and post-hospitalisation expenses for a specified period, usually 30 days prior to hospitalisation and 60 days after discharge. This feature helps in managing the overall medical costs effectively.

  • Tax Benefits: Under Section 80D of the Income Tax Act 19611, premiums paid towards a mediclaim policy are eligible for tax deductions. This provides an additional advantage for policyholders.

What is a Health Insurance Policy?

A health insurance policy is a comprehensive coverage plan that offers a wider range of benefits compared to a mediclaim policy. It not only covers hospitalisation expenses but also includes preventive care, outpatient treatments, and other related medical expenses.

It is a formal agreement between an individual (the insured) and an insurance company (the insurer). The insured pays a regular premium in exchange for financial coverage against medical expenses arising from illness, injury, or accident. These policies can cover a wide range of costs, including hospitalisation charges, surgery fees, doctor consultations, diagnostic tests, and prescription medications.

Health insurance plans offer peace of mind and financial security, protecting you from the burden of potentially high medical bills. They come in various types and with different coverage options, so it's crucial to choose a plan that aligns with your specific needs and budget.

Benefits of Health Insurance

The benefits of health insurance are as follows:

  • Holistic Coverage: Health insurance provides comprehensive coverage, including hospitalisation expenses, outpatient treatments, diagnostics, maternity benefits, and even critical illnesses. This ensures that you are financially protected against a wide range of medical expenses.

  • Preventive Care: These days, many health insurance policies offer preventive care benefits such as vaccinations, wellness check-ups, and screenings. These services help detect potential health issues early on, leading to better overall health management.

  • Critical Illness Coverage: Health insurance policies typically cover critical illnesses like cancer, heart disease, stroke, etc. Such coverage provides financial stability in case of a major health crisis and allows you to focus on recovery without worrying about medical expenses.

  • Renewing Health Insurance: Health insurance plans are usually renewable, providing coverage for a longer duration. Renewing Health Insurance ensures that you can continue to enjoy the benefits without any breaks or loss of coverage.

Difference Between Mediclaim and Health Insurance

To better understand the disparities between mediclaim and health insurance, below is a table highlighting their key differences:

Feature

Mediclaim Policy

Health Insurance Policy

Scope of Coverage

Primarily hospitalisation expenses

Covers hospitalisation, pre & post hospitalisation expenses, daycare procedures, ambulance charges

Claim Settlement Ratio

Reimbursement based on actual expenses incurred

Reimbursement or fixed benefit, depending on the plan

Cost

Generally cheaper

More comprehensive coverage leads to higher premiums

Additional Benefits

Basic coverage without extensive add-ons

Extensive add-ons and benefits available (critical illness, maternity, etc.)

Outpatient Treatment 

Typically not covered

Usually covered

Preventive Care

Usually not covered

Generally covered

Critical Illness

Usually not covered

Coverage provided

Sum Insured

Lower

Higher

Renewability

Limited

Usually renewable

Policy Term

Short-term

Long-term

Factors to Consider Before Buying Mediclaim or Health Insurance  

When deciding between mediclaim and health insurance, it is important to consider the following factors:

  • Coverage Needs: Assess your medical needs and determine which type of insurance policy aligns with your specific requirements. If you are looking for comprehensive coverage, health insurance might be the better option.

  • Budget and Affordability: Consider your budget and affordability while choosing between mediclaim and health insurance. Health insurance policies tend to be costlier due to their extensive coverage, so evaluate your financial capabilities before making a decision.

  • Policy Duration: Determine how long you need coverage. If you want coverage for a short duration, a mediclaim policy might be suitable. However, if you want long-term coverage, health insurance is generally a better choice.

Should You Buy a Mediclaim Policy or Health Insurance in India?

Choosing between a mediclaim policy and health insurance in India depends on the specific needs and circumstances of an individual.

If you primarily require coverage for hospitalisation and are looking for a more cost-effective option, a mediclaim policy might be suitable. On the other hand, if you want comprehensive coverage for various medical expenses, including outpatient treatments, preventive care, and critical illnesses, a health insurance plan would likely be the better choice.

What Offers Better Coverage: Health Insurance or Mediclaim?

In terms of coverage, health insurance policies provide a broader range of benefits compared to mediclaim policies. Most health insurance plans cover hospitalisation expenses, outpatient treatments, preventive care, and critical illnesses and often come with additional benefits such as maternity coverage and wellness programs. Therefore, for those seeking extensive coverage, health insurance is the recommended choice.

Conclusion

Both mediclaim and health insurance serve the purpose of providing coverage for medical expenses. However, there are significant differences between the two. Mediclaim policies offer coverage for hospitalisation expenses, while health insurance provides comprehensive coverage for various medical expenses, including outpatient treatments, critical illnesses, and preventive care. 

It is essential to assess your needs, budget, and future requirements before making a decision between the two. Learning about mediclaim vs health insurance and consulting with an insurance professional can help you choose the right policy that meets your specific needs.

FAQs on Mediclaim vs Health Insurance

1. What is better- health insurance or medical insurance?

Health insurance offers a wider range of benefits compared to medical insurance. It covers hospitalisation expenses, outpatient treatments, preventive care, and critical illnesses, whereas medical insurance is limited to covering hospitalisation expenses. 

2. What are the benefits of mediclaim and health insurance?

The benefits of mediclaim include financial protection, cashless hospitalisation, coverage for pre and post-hospitalisation expenses, and tax benefits1. Health insurance, in addition to these benefits, offers comprehensive coverage, preventive care, and coverage for critical illnesses.

3. Is health insurance better than mediclaim for tax benefits?

Both health insurance and mediclaim policies offer tax deductions under Section 80D of the Income Tax Act1. The choice between the two depends on your overall coverage needs and preferences.

4. Which diseases are covered under health insurance and mediclaim?

Health insurance policies typically cover a wide range of diseases, including critical illnesses like cancer, heart disease, stroke, etc. Mediclaim policies primarily cover hospitalisation expenses and may not include coverage for specific diseases.

5. Is a mediclaim policy the same as health insurance?

A mediclaim policy is a subset of health insurance. It specifically covers hospitalisation expenses, while health insurance provides a broader scope of coverage, including hospitalisation, outpatient treatments, preventive care, and critical illnesses.

6. Is health insurance better than mediclaim?

Health insurance offers comprehensive coverage and a broader range of benefits compared to a mediclaim policy. It provides coverage for hospitalisation, outpatient treatments, preventive care, and critical illnesses. Therefore, health insurance is generally considered to be better than mediclaim in terms of coverage.

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Francis Rodrigues 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.

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Vishal Subharwal 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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