What is the difference between health insurance and mediclaim? And which one is better and why?

What is the difference between health insurance and mediclaim

A common misconception among people is that mediclaim and health insurance policies are all the same. In fact, people were aware only of mediclaim policies until health insurance came into the market. Presently, several reputed companies have designed health insurance schemes. In case you are willing to keep yourself protected against unexpected expenses arising due to medical factors, you need to choose between a mediclaim policy and a health insurance policy. These two are different from each other, and it is important to get the right policy for yourself and your family.

The key difference between a mediclaim and a health insurance policy is the limitation that lies in mediclaim, with respect to hospitalization expenses. Health insurance schemes, on the other hand, offer more comprehensive schemes, that encompass facilities more than simply hospitalization expenses. On the other hand, a mediclaim policy offers a comprehensive hospitalization and treatment due to certain illnesses or accident. The benefits vary upon the sum of money that has been insured. Any amount exceeding this level needs to be borne by the person holding the policy.

 Here, you will come to know about the key differences between these two types of policies.

What is a mediclaim policy?

A mediclaim policy is a type of agreement between the insurer and the policyholder, through which the latter can get specified financial coverage against expenses related to health. It is an affordable way to minimize expenses during health-related issues. However, the coverage in a mediclaim policy remains limited to certain expenses, including hospitalization. Expenses other than these have to be managed by the insurer.

Features of a mediclaim policy

A mediclaim policy has got certain features, that differentiates it from a health insurance policy.

  • Coverage: Through a mediclaim policy, you can get a coverage against expenses due to hospitalization and treatment due to specific diseases and accidents.
  • Assured sum: In a mediclaim policy, that sum of money that you can get is generally pre-decided.
  • Factors affecting premium: The premium that a policyholder needs to pay is decided on the basis of the age of the proposer, sum assured, duration of the plan and geographical location.
  • Settlement of claim: You can avail cashless treatment as well as reimbursement of the expenses in case you buy a mediclaim policy.
  • Basis of plan: A policyholder can get a family floater in order to enjoy a comprehensive coverage as well as an individual policy. The family floater may cover the spouse, dependent parents, dependent children and self.
  • Tax benefits: The premium paid for a mediclaim coverage can help you to get tax benefits, according to Section 80D of the Income Tax Act, 1961.

     What is a health insurance policy?

A health insurance policy is a scheme that covers the cost of surgical and medical expenses that the policyholder incurs. The insured person needs to pay the expenses from the pocket and later get the amount reimbursed by the insured company. Alternatively, the insurer directly settles the bills with the concerned hospital. The terms and conditions of the agreement determine the features and benefits of the policy. In certain cases, the coverage is more extensive and costly, as compared to a mediclaim policy.

Features of a health insurancepolicy

A health insurance policy is typically different from a mediclaim policy. Read the features to understand the schemes better:

  • Coverage: When you buy a health insurance policy, you can enjoy a comprehensive coverage, that covers the critical illnesses for a number of diseases. However, you should note that critical illnesses are not a part of the basic scheme, it is actually a rider that you can opt for a greater range of cover.
  • Discounts on renewal: At the time of renewal, health insurance comes with certain benefits for the policyholder, when a claim-free year comes to an end. This benefit is popularly termed as ‘no claim bonus’.
  • Co-payment: The option for co-payment is available with certain health insurance policies. This helps in minimizing the premium of the insurance, as the insured person pays a particular percentage of the treatment expense, and the insurance company pays the rest.
  • Tax benefits: As per Section 80D of the Income Tax Act, 1961, the policyholder is eligible for tax benefits.

Difference between a mediclaim and health insurance policy

 Have a look at the key differences between a mediclaim and health insurance policy:

  • Coverage offered: In a mediclaim policy, the coverage is available for treatments related to accidents and hospitalization for pre-specified diseases. The sum insured also has a specified limit. However, a more comprehensive coverage is available with a health insurance policy. You can get financial support against pre-hospitalization, hospitalization and post-hospitalization charges, expenses on ambulance and so Besides, you can also enjoy a compensation, if you suffer a loss in income, as an impact of an accident.
  • Add-ons: Generally, mediclaim policies do not offer any add-on benefits. However, when you get a health insurance policy, you can enjoy coverages for personal accident, critical illnesses, maternity coverage and accidental disability benefits.
  • Flexibility: Mediclaim policies are not too flexible. In terms of flexibility, health insurance policies offer better features. The policyholder may reduce the premium they pay after a particular period and change the duration of their policy. In order to maximize the benefits of the insurance, they can go for the long-term policies.
  • Features of plan: The features of a mediclaim policy vary from one company to another. In case of a health insurance coverage, the features for a particular sum are generally the same for most of the companies.

Should you go for a mediclaim or health insurance policy?

You may buy a mediclaim policy, if you want to avail financial back-up in times of medical emergencies at a low budget. The premium rates are low and you can buy a comprehensive package to keep your family members protected. However, if you are looking for a policy and enjoy a higher coverage, it is wise to go for a health insurance policy. Check out the plans that the reputed companies have designed and make your purchase.

Olivia Wilson is a digital nomad and founder of Todays Past. She travels the world while freelancing & blogging. She has over 5 years of experience in the field with multiple awards. She enjoys pie, as should all right-thinking people.

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