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

Mediclaim

Most people believe that Mediclaim is the same as a health insurance policy, which is not the case. 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 the difference between mediclaim or health insurance to help you make a better decision.

Related: Group health insurance vs Individual health insurance

Mediclaim

 

• Mediclaim is a form of health insurance. The main feature is the hospitalisation expenses and treatment towards an accident or specific illness.

• It is generally for a pre-specified sum. The premium of the Mediclaim 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.

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. However, a CI rider is not part of basic health insurance but must be bought as an add-on. 

• You can also avail the discount on the premium for health insurance 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 a 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: 9 rules while buying health insurance [video]

Mediclaim vs Health insurance

The stark differences between mediclaim and health insurance are:

• Mediclaim is mainly for covering hospitalisation expenses. A health insurance plan 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 5 lakhs. In health insurance, cover given is more extensive and the sum insured can exceed 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 plan, 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 to meet out-of-pocket expenses with Daily Hospital Cash plans

When deciding between getting a mediclaim or health insurance policy, 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. 

 

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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