Mediclaim vs. Health Insurance - Get the Difference

Difference Between Mediclaim vs. Health Insurance

Mediclaim vs. health insurance is a common confusion among people. Mediclaim policies are usually cheaper than health insurance policies, making them an affordable option. However, health insurance provides wider coverage and a higher sum insured. Moreover, health insurance offers add-on coverage and tax benefits.

Introduction

Mediclaim vs health insurance is an ongoing debate in the health finance sector. They both play significant roles in safeguarding people’s health in India. As medical costs surge, investing in one becomes crucial and necessary. Although people often use these terms interchangeably, they offer distinct benefits. While a mediclaim policy primarily focuses on hospitalisation costs, health insurance goes beyond that.

Here we will discuss the mediclaim vs. health insurance difference and help you choose the right one.

What is a Mediclaim Insurance Policy?

Mediclaim insurance policy is a type of health insurance that reimburses the policyholder for costs incurred in treating an illness. Usually, you have to submit your hospital bills to get your payment. However, you can also opt for a cashless feature, where the insurance company will directly pay the hospital.

What is a Health Insurance Policy?

A health insurance policy includes comprehensive coverage for treating an illness. This could be hospital bills or additional charges required for treatment. The benefits that you get depend on the policy’s inclusion and exclusion. Insurance companies generally reimburse the policyholder. However, one can also opt for direct bill settlement with the hospital.

Difference between Mediclaim Insurance and Health Insurance Plans

To understand these commonly used insurance terms better, let us compare them in the following mediclaim vs health insurance table:

5 Things that Make Health Insurance Better than Mediclaim

Mediclaim and health insurance are both beneficial for your savings. However, medical insurance offers much more comprehensive coverage in the face of adversity. Here are 5 ways a health insurance policy provides greater benefits than mediclaim:

● Higher Sum Insured

Sum insured refers to the maximum amount your insurance provider will pay in one policy year. Health insurance companies allow a sum insured amount of Rs. 5 lakh to Rs. 2 crore in India. However, this depends on the specific policy and individual contributions.

A higher sum insured amount allows you to be stress-free in the event of a major surgery or illness.

● Wider Coverage

Unlike mediclaim, a health insurance policy offers wide coverage, including pre-hospitalisation, ambulance charges, post-hospitalisation and other associated costs. Mediclaim, on the other hand, usually only covers inpatient hospitalisation costs. Although it is beneficial for smaller treatments, emergencies, and critical illness, call for comprehensive coverage.

● Tax Benefits with Flexibility

According to the Income Tax Act of 1960, you can claim tax deduction on health insurance premiums. Self-claim is limited to Rs. 25000, while claims for spouse, children, and family members, along with self, can reach Rs. 50000.

For senior citizens, the maximum deduction limit is Rs. 50000. Moreover, under Section 80D of the Income Tax Act, 1960, preventative health checkups and medical expenses for senior citizens are also claimable.

● Add-on Benefits

Health insurance allows add-on or top-up options. This provides you with a customisable plan, unlike the one-size-fits-all approach of mediclaim. Under health insurance, you can add the following:

1. Critical illness cover
2. Maternity benefit cover
3. Outpatient department (OPD) cover

This makes health insurance plans much more flexible and comes to your aid when life throws unexpected hurdles along your way.

● Cashless Network Hospitals

Health insurance companies offer more than 14,000 cashless hospitals in their network. This opens up the scope for accessing the best healthcare across states. Mediclaim, on the other hand, does not offer a wide network of cashless hospitalisations. This limited access can hamper you in times of need and is a critical factor in differentiating mediclaim policy vs. health insurance.

Points to Remember Before Buying a Health Insurance or Mediclaim Insurance Plan in India

Whether it is your first time buying insurance or you have previous experience with it, keeping in mind the following points will help you choose the right one:

● Claim Settlement Ratio (CSR)

This refers to how many claims your insurance provider has settled. Having a high claim settlement ratio ensures that your insurer is legitimate. Check for previous customer reviews and experiences.

● No Claim Bonus

No claim bonus refers to a discount which your insurer gives you for the years you have not claimed any settlement. Therefore, when you renew your policy, your basic coverage amount increases. The higher the percentage of NCB, the more you benefit. Always ask whether your policy offers this benefit.

● Waiting Period

Waiting periods generally range from 24-36 months. During this time, insurance providers usually do not accept any claims for diseases such as high blood pressure, thyroid, or diabetes.

Choose an insurance provider with the lowest waiting period for maximum benefits.

Final Thoughts

Knowing the difference between mediclaim vs health insurance is necessary to evaluate your health finance needs. While both offer their share of advantages, health insurance is a better choice if you and your family members suffer from various diseases. Take charge of your health today and invest in a health insurance policy!