Nowadays, owing to deteriorating environmental conditions and the modern-day sedentary lifestyle, health is always at risk. This is why getting health insurance must be a top priority for all. According to research by the Pristyn Care Data Labs, over 60% of patients put off their medical treatments due to the absence of a health insurance cover. Always remember that you shouldn’t take your health for granted and that a medical emergency can appear at any time. To handle such emergencies and avail benefits at the same time, there are two efficient methods. Either you can go for a health plan or mediclaim policy.
The general public often loses the difference between the two. While one furnishes comprehensive coverage, the other provides some set benefits. People often make mistakes when purchasing health insurance. Most people hold a misconception that mediclaim and health insurance are the same things. However, this is not the case; both differ from each other on multiple bases. This article will go through complete details of how a mediclaim policy differs from health insurance.
Hence, it is crucial to understand the difference between mediclaim and health insurance to choose the one that complements all your needs. To understand the difference, continue reading.
What is a Health Insurance Plan?
A health insurance plan offers comprehensive coverage for unforeseen medical expenses. It aims to provide the policyholder with complete financial protection in case of sickness, injury, or accident. Health insurance covers additional costs, such as pre-and post-hospitalisation, home health care, and non-allopathic treatments (Ayurveda, Siddha Homoeopathy, Naturopathy, and more), in addition to in-patient hospitalisation expenses for medical care. Along with other things, it also covers the cost of several surgical treatments, outpatient treatments, and more.
What is a Mediclaim Insurance Policy?
A mediclaim policy is a type of insurance plan which offers specific/limited coverage for certain medical conditions. The predefined and limited scope of coverage of a mediclaim is only applicable to certain types of accidents, illnesses, and injuries. The coverage is only sufficient to pay for in-patient hospitalisation at an allopathic center or a home care facility. Additionally, the sun insured for a policyholder is pre-determined and beyond which he or she cannot file a claim
Main Differences Between Health Insurance and Mediclaim Policy
Below are some of the key points highlighting the difference between the two:
- Basic Coverage: As you can see from the basic definition, a health insurance plan offers comprehensive coverage for various expenses such as ambulance, maternity expenses, dental treatment, OPD, diagnostic tests, and so much more. In contrast, a mediclaim policy only pays for hospitalisation costs incurred due to an accident, illness, or surgery.
- Sum Insured (SI): A health policy offers more coverage than a mediclaim, with the amount covered with a mediclaim policy often being up to ₹5 lakh. The amount covered under a health insurance policy is influenced by a variety of variables, including the insured’s age, any pre-existing conditions, where they live, the number of people in the plan, etc.
- Claim Settlement: Since health insurers employ third-party administrators for claim settlement, unlike mediclaim policies, the claim settlement procedure in a health insurance policy is much simpler than in a mediclaim policy. Hospitalisation expenses can be reimbursed under mediclaim up to a specific limit. However, it wouldn’t pay for any additional costs. At the same time, health insurance offers a lump sum amount for a certain period and covers the majority of hospitalisation-related costs. In terms of settling claims, many health insurances permit multiple claims throughout the year, outpatient department expenses, and daily cash payments with other benefits, making it more advantageous than mediclaim.
- Critical Illness Cover: A mediclaim does not provide coverage for critical illness treatment expenses. On the contrary, according to the terms and conditions of the policy, health insurance provides coverage up to a specific critical illness (such as cancer, stroke, etc.). So, before selecting a health insurance plan, make sure to check these things.
- Add-on availability: There are no add-on covers available for the mediclaim policy that would allow you to increase your total protection. A health insurance policy, on the other hand, provides a number of add-on or rider choices that can help you acquire complete coverage. Some of the add-ons are Personal Accident cover, Room Rent waiver, Maternity cover, Critical Illness Rider etc.
- Tax Benefits: Since we get benefits in the form of tax returns, the tax allowances offered by each plan are particularly essential when choosing between Mediclaim and health insurance.As per Sec 80D of the Income Tax Act, health policies are eligible for deductions up to ₹25,000. This deduction can be availed on health insurance payments for your own, your family, and other dependents. In the case of a health insurance policy, this exemption limit can go as high as ₹75,000. For mediclaim policies, there is only a maximum tax exemption of ₹15,000 allowed on the amount of premium paid.
- Personalisation: Mediclaim insurance does not provide you with the freedom to modify your plan as per your requirements. However, if you pick a health plan, you can alter the premium amount, plan choice, sum insured option, policy duration, and rider options as per your preference.
Health insurance and mediclaim policy are two different kinds of plans that provide financial assistance in the event of medical emergencies. While the former is more comprehensive and advantageous for the whole family, the latter is limited to just hospitalisation costs. Additionally, the add-ons available with health insurance plans can increase their value to provide financial support during a tough time.
Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.