How Mediclaim differs from a health insurance policy

Health insurance and mediclaim policy are two terms that often creates confusion. Read this article to understand the difference between the two

How Mediclaim differs from a health insurance policy

Most people believe that a mediclaim policy is the same as a health insurance policy, which is not the case. There are many ways how mediclaim and health insurance differs. While mediclaim is limited to domiciliary care and hospitalisation expenses, health insurance has a much deeper coverage. For instance, health insurance plan may also include pre and post hospitalisation expenses, and several other charges. Listed below are some points that will help understand the difference between mediclaim and health insurance. Read on and make a better decision to safeguard your health.

Related: Health Insurance 101

Mediclaim policy vs health insurance policy

Let’s first understand what a mediclaim policy is and what it entails. 

  • Mediclaim is a form of health insurance. The main feature is hospitalisation expense cover and treatment towards an accident or specific illness.
  • Mediclaim policy is generally for a pre-specified sum. The premium of the mediclaim policy depends on the sum insured, gender, age of the proposer, geographical area of the treatment and term of plan. 
  • Through a mediclaim policy, you can either be reimbursed for hospitalisation expenses or you can opt for a cashless procedure, wherein your insurer will pay the hospital directly.
  • A mediclaim premium, for either self or for a dependent like a spouse or children, comes under the tax exemption – Section 80D of Income Tax Act 1961 too.

Now let’s discuss health insurance:

  • Health insurance plans are more comprehensive than mediclaim.
  • They provide greater cover, including comprehensive critical illness (CI) cover for more than 30 illnesses as per some health insurance plans. This is one of the biggest factors how mediclaim and health insurance differs. However, a CI rider is not part of basic health insurance policy, but must be bought as an add-on. 
  • You can also avail the discount on the premium for a health insurance policy if the insured sum is more than, say Rs. 10 lakhs. 
  • Some health plans also offer a co-payment feature, which helps lower your premium. Here, part of treatment is paid by you, while the rest is taken care of by your insurer. 
  • Health insurance premium also provides tax exemption under section 80D.

Related: All about critical illness plans and how to choose one

Difference between mediclaim and health insurance

Here is a stark revelation of how mediclaim and health insurance differs:

  • Mediclaim is mainly for covering hospitalisation expenses. A health insurance policy covers hospitalisation expenses, pre-post hospitalisation expenses, ambulance charges, compensation for the lost income, etc. depending on the policy benefits. 
  • The hospitalisation cover in mediclaim is limited which mostly does not exceed Rs 5 lakhs. In health insurance, cover given is more extensive and the sum insured can exceed Rs 60 lakhs.
  • Hospitalisation is necessary to avail mediclaim benefits, which is not necessarily the case with health insurance.
  • In a mediclaim policy, the hospitalisation expenses incurred can either be reimbursed or cashless, in which case your insurer pays the hospital directly. A health insurance policy, on the other hand, can be cashless, or provide reimbursements on treatment costs and could even pay out a lump sum in case of an eventuality (e.g. critical illness plans, hospital cash plans).  

Related: How tax- savvy are you? Find out with this quiz!

When deciding between getting a mediclaim and a health insurance policy, understand the difference between mediclaim and health insurance offer basis your needs. It is important that you take into account the kind of cover you need, your medical history, current financial situation, etc. This will help you find a policy that is just right for your needs. 

Related: 9 Rules while buying health insurance

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or insurance or tax or legal advice. You should separately obtain independent advice when making decisions in these areas.


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