Mediclaim vs Health Insurance: Know The Difference

That everyone needs Health Insurance is a no-brainer. At about 15% per year, medical inflation is soaring in India. And the pace at which lifestyle diseases are rising adds to the importance of having insurance.You may have heard about Mediclaim, which is often confused with a Health Insurance policy. While the main similarity between the two is to protect you financially when faced with a medical condition, the two differ in many aspects.You must know the difference between the two to understand which type of policy may be better for you. Read on!

Mediclaim is a form of Health Insurance that covers hospitalisation expenses to the extent of the sum assured. Unlike a Health Insurance policy, a Mediclaim policy does not provide additional benefits such as covering pre- and post-hospitalisation expenditures, ambulance charges, or serious illnesses.As a result, Mediclaim policies are cheaper than Health Insurance policies and are appropriate for those who merely want to cover their hospitalisation bills.

A Mediclaim policy offers the following benefits.

• Protection against costs arising from hospitalisation
• Coverage of the entire family
• Cashless hospitalisation if the hospital is on the network
• Tax deductibility of premium paid
• Can be purchased online

Much like Health Insurance, Mediclaim does not cover certain medical costs arising from the following situations:

• Corrective cosmetic surgery
• Pregnancy
• Infertility treatment
• Sexually transmitted diseases
• Permanent exclusions
• Self-induced injuries
• Injuries inflicted due to alcohol consumption

Health Insurance goes beyond hospitalisation charges and offers additional benefits. These benefits include coverage of various medical bills, such as pre-and post-hospitalisation fees, ambulance charges, diagnosis tests leading to hospitalisation, etc. Because Health Insurance offers more benefits than a plain Mediclaim policy, it is typically more expensive.Health Insurance also offers Critical Illness coverage, wherein the policyholder can get a lump sum if diagnosed with a critical, life-threatening disease.

You must understand the benefits of Health Insurance as it can help you choose between Mediclaim and Health Insurance. When you opt for Health Insurance, you enjoy the following benefits.

• Health Insurance policies shield you from excessive medical bills. It covers hospitalisation, daycare operations, domiciliary fees, and ambulance rates, among other things.
• Critical Illness plans are now available from insurers as solo policies or riders. Such policies cover life-threatening disorders, such as kidney failure, limb loss, bone marrow transplant, stroke, etc.
• Insurance companies often provide cashless claim services. Under this agreement, you do not have to pay out of pocket. Your insurer settles the hospitalisation bills and other costs directly with the hospital.
• Health care plans provide tax advantages. Premiums for Health Insurance policies qualify for tax deductions under Section 80D of the Income Tax Act, 1961.
• Many businesses offer group insurance to their employees. However, they cannot be tailored to meet everyone's specific needs.

Also read: What is Lifetime Renewability in Health Insurance?

• Health Insurance does not cover costs arising from the conditions:
• Corrective cosmetic surgery
• Diagnostics charges, not leading to hospitalisation
• Expenses incurred on alternative therapies
• Health supplements
• Injuries inflicted due to alcohol consumption
• Pregnancy
• Infertility treatment

Buying insurance can be an expensive proposition. Therefore, it is important to understand the difference between Health Insurance and Mediclaim to make an informed decision. Here are the key differentiators between the two.

Coverage

A Mediclaim policy covers hospitalisation expenditures, accident-related charges, and disease-specific expense protection. However, there is no additional rider available for purchase.On the other hand, a Health Insurance plan provides full medical coverage against hospitalisation charges, pre- and post-hospitalisation charges, ambulance expenditures, etc. It may also compensate for lost income due to an illness/accident.

Critical Illness

A significant difference between Mediclaim and Health Insurance is that Mediclaim does cover critical illnesses. Health Insurance, on the other hand, covers more than 30 essential ailments such as kidney failure, heart disease, cancer, etc. This is a major difference between Mediclaim and Health Insurance.

Flexibility

Mediclaim is a set plan that you cannot change. On the other hand, Health Insurance lets you adjust the plan time, premium amount, or features during the policy term.

Consistency of features

Mediclaim features differ from one insurance company to the other. Health Insurance, on the other hand, is similar across insurance companies for a particular range of sum assured. Mediclaim and Health Insurance must be vetted properly for this key difference.

Insured amount

A Mediclaim insurance policy usually covers an amount not exceeding ₹ 5 lakhs. On the other hand, Health Insurance plans can insure a much higher amount.

Add-on covers

Mediclaim does not offer additional coverage, even at a cost. On the other hand, a Health Insurance plan allows you to customise your coverage as per your needs.Also Read: What is Pre and Post Hospitalization Coverage in Health Insurance?

The following is an overview of the various types of Health Insurance that you might choose depending on your insurance requirements:

Individual Health Insurance

Individual Health Insurance covers a single person. This plan reimburses you for illness and medical expenses you incur. Medical Insurance plans cover all hospitalisation, surgery, and pre-and post-medication expenses up to the insured limit.

Family Health Insurance policy

Family Health Insurance Policy, or the Family Floater Plan , protects your whole family under a single policy. Family Health Insurance policies cover all family members, including spouses, children, and elderly parents. Only one family member pays the premium, which protects the entire family for a single fee.

Critical Illness

A Critical Illness Insurance plan or rider protects the individual by providing a lump sum amount if you are diagnosed with a life-threatening disease.

Senior Citizen Health Insurance

As the name suggests, it provides coverage to adults aged 65 and up. The policy will cover the expense of hospitalisation and medications, whether caused by a medical condition or an accident. In addition, various other benefits, such as domiciliary hospitalisation and psychiatric care, are provided.

Top-up Health Insurance policy

You can purchase a Top-Up Health Insurance plan if you need additional coverage. However, a "deductible clause" has been introduced to this policy. Therefore, when you make the claim, the payout provided surpasses the pre-defined maximum specified limit in the policy.Furthermore, you can get a Super Top-Up plan that provides additional coverage beyond ordinary insurance to increase the sum covered. You can only use it once you have depleted the sum insured from the standard policy. Also read: 7 Important things to look for while buying a Health Insurance policy

Things to consider when deciding between Mediclaim and Health Insurance

So, which is more beneficial to you: Mediclaim or Health Insurance? It depends on factors such as the premium amount you are willing to pay, your age, family size, medical history, etc.Remember that the greater the features, the higher your premium will be. Choose between Health Insurance vs Mediclaim based on the following factors.

• Consider your or your family members' age, life stage, and medical condition.
• The amount of sum assured is one of the major differences between Health Insurance and Medical Insurance. Health Insurance is a better choice if you need a higher coverage amount.
• Decide whether you want an individual plan or a family floater based on your dependants and who all need protection.
• Health Insurance typically includes a no-claims bonus payout during policy renewal. This can tip the scale in favour of Health Insurance if you are healthy.
• The premium cost that you are willing to pay.

• Mediclaim vs Health Insurance policies fulfil various goals, and it is important to grasp the distinctions between the two before deciding.
• Mediclaim is a no-frills policy that covers only hospitalisation, while a Health Insurance policy may offer several additional benefits at a cost.
• Before buying a Health Insurance plan, consider your healthcare expectations and compare several insurance plans that meet your insurance needs.
• Remember that your greatest wealth is your health, and that effectively managing healthcare spending is the key to sustaining excellent health and financial stability.