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Individual Health Insurance – A Quick Guide

Should You Buy Mediclaim or Health Insurance?

COVID-19 pandemic has brought to life a highly contagious virus and with it comes financial instability and a slowdown in the global economic structure. So, this means you have to protect yourself from the ongoing pandemic and also keep yourself financially and medically secure. For this reason, people are focusing on health insurance today more than ever; as it almost as necessary as it is to maintain social distancing and hand/respiratory hygiene.

In the financial year of 2019, nearly 472 million Indians were insured under health insurance schemes. Out of which maximum number of people were insured under government- health insurance schemes, while lowest number of people were covered under individual health insurance plans.

Let us check out the details of the 2 types of insurance cover in India that you can buy:

  1. Mediclaim Insurance
  2. Health Insurance

What is Mediclaim Insurance?

Mediclaim is also termed as mediclaim insurance, and is a form of health cover that mitigates your financial risk during a medical treatment.  You know with mediclaim policies you can get your hospitalization expenses covered along with any specific diseases and its treatment expenses incurred during the hospitalization.

If you have a mediclaim policy you can avail financial protection to deal with a medical emergency requiring hospitalization in case of:

  • an accident
  • sudden illness or surgery
  • surgery during the policy duration

There are two types of Mediclaim claim facilities that are available, one is cashless treatment and second is reimbursement for the expenses incurred.

Benefits of Mediclaim Insurance

  • It offers immediate insurance coverage against hospitalization expenses
  • If you go for cashless mediclaim policy, the insurer pays the bills directly to the network hospital
  • If you opt for reimbursement, then the insurer will reimburse your claim amount

How Does a Mediclaim Insurance Plan Work in India?

Here are the features of mediclaim insurance policies in India:

  • Coverage - A mediclaim health insurance provides insurance coverage against hospitalization expenses, treatment expenses due to an accident and specific diseases.
  • Sum Insured - Generally, it comes with a pre-decided sum insured amount
  • Factors affecting the Premium - Mediclaim insurance policy premiums are formulated on the basis of the sum insured, the proposer’s age, gender, geographical location and opted duration of the preferred plan.
  • Claim Settlement - A mediclaim claim is processed in the form of reimbursement as well as cashless treatment.
  • Plan Basis - The plan can be purchased on an individual as well as family floater basis. In a family floater plan, it covers self, spouse, dependent children, and dependent parents.
  • Tax Exemption - The plan offers tax benefit as per Section 80D of IT Act 1961.

How much Mediclaim Should you Have?

As per the insurance experts, coverage under your health insurance should be at least 50% of your yearly income. A minimum of Rs 10 lakh of medical insurance cover is required to meet expensive treatments like by-pass surgery, COVID treatment, etc. The coverage can go as high as Rs 1 Crore.

What is the Process of Mediclaim Policies in India?

To avail mediclaim benefits, you need to provide your medical bills, receipts, and medical reports in order. All the medical documents and bills containing all the required information like patient's name, cost involved, etc. is essential. A claim form is also another important document. You can easily download it online from the insurer’s site.

What is Cashless Mediclaim Policy?

A cashless mediclaim policy pays for all the medical expenses directly to the network hospital. Simply put the insurer pays the amount directly to the hospital where you are undergoing treatment. It does not require you to pay the medical expenses out of your own pocket. You can avail cashless mediclaim at of the network hospitals.

Which is the Best Cashless Mediclaim Policy in India?

Or, your question might be, which mediclaim policy is best in India? While both these insurance plans offer tax benefits under section 80 D of the Income Tax Act, insurance experts recommend going for a health insurance plan, since it offers comprehensive insurance coverage. Before you search for the best plan, search for which health insurance company is best in India.

If you are wondering about the top best health insurance companies or the best mediclaim policy in India for that matter, we don’t mean to burst your bubble, but there is no ‘best’ insurance company or plan. Insurance expectations are individualistic; one plan doesn’t fit everybody. Similarly, one insurer might make one buyer happy while falling short of the mark for another. That’s why health insurance companies offer a wide range and various types of insurance plans.

What is Health Insurance?

A health insurance is an insurance that offers complete coverage for emergency medical and surgical expenses. A health insurance policy in India either directly settles your hospital bills at the network hospitals or you can get reimbursement of your medical expenses if the treatment is availed at a non-network hospital.

How does a Health Insurance Plan Works in India?

Here are the features of health insurance plans that you can avail in India:

  • Coverage - Health insurance plan offers comprehensive insurance coverage, includingcritical illness cover for up to 30 plus illnesses.
  • Critical Illness Cover- A critical illness isn’t a part of a basic health plan; it’s a rider that can be opted for as an additional cover.
  • No-claim-bonus - Generally, health insurance comes with a benefit upon the time of renewal after the end of a claim-free year. This benefit is known as No Claim Bonus.
  • Co-payment - A few health insurance policies come with an option of co-payment. It helps to decrease the insurance premium as a particular percentage of the treatment expense is paid by the insured and the remaining balance is paid by the insurance company.
  • Tax Benefits - Under section 80 D of the Income Tax Act, a health insurance plan offers tax benefits.

Benefits of Health insurance

  • A health insurance policy offers comprehensive coverage benefits
  • It offers various health insurance add-on benefits
  • You can opt for an individual/family floater/ critical illness/ senior citizen/COVID-19 health insurance policy
  • Health insurance policies also covers pre and post hospitalization expenses
  • It gives you the option to avail Critical Illness cover
  • You can opt for Outpatient treatment benefit, restoration benefit, and Maternity Benefit
  • There are several health plans to meet your different requirements

Both health insurance and mediclaim sounds similar but you will be surprised to know the differences between the two.

What is the Difference between Mediclaim Insurance and Health Insurance?

Let’s explore how health insurance is different from mediclaim insurance.

Basis

Mediclaim

Health insurance

Offered Coverage

A mediclaim plan provides coverage only for hospitalization, accident-related treatment and pre-decided diseases for a pre-specified limit. 

A health insurance plan offers comprehensive coverage against hospitalization charges, pre-hospitalization charges, post-hospitalization charges, ambulance expenses.

Additionally, it offers compensation in case of loss of income as a result of an accident.

Add on Coverage

It doesn’t offer any add-on coverage.

In order to enhance the insurance coverage, it offers critical illness coverage, personal accident coverage, accidental disability coverage, maternity coverage etc.

Flexibility

When it comes to coverage, it offers no flexibility. 

On the other hand, a health insurance plan offers much-needed flexibility. Insurance buyers can reduce their health insurance premium amount after a specified period; they can even change their policy duration. They can avail long-term policies to enjoy maximum insurance benefits.

Plan Features

Features of a mediclaim plan vary from one insurance provider to insurance provider. Generally, different mediclaim insurance companies offer different mediclaim insurance coverage.

Generally, the benefits and features of a health insurance plan of a specific sum insured are the same over most insurance providers.

Critical Illness Cover

It does not provide coverage for critical illnesses.

It provides critical illness coverage for more than 30 plus critical diseases such as cancer, stroke, kidney failure, etc.

Sum Insured

The sum assured for a medical insurance plan doesn’t exceed 5 Lakh Rupees.

 

The sum assured for a health insurance plan doesn’t exceed 6 Crore Rupees per year. That is to say, health insurance provides extensive coverage.

Claims

In the mediclaim plan, a policyholder can file claims until the total amount assured is exhausted.

In health insurance, when claims related to critical illness/ accidental disability coverage arise, the sum insured is paid in lump sum.

Such claims can only be made only once during the entire policy duration or once during the policy tenure.

Other than that, an insured can file claims as long as his/her sum insured isn’t exhausted.

Hospitalisation

In order to avail mediclaim benefits, it is necessary that the insured gets hospitalized.

In order to avail health insurance benefits, it is not necessary that an insured gets hospitalized. Benefits like day-care procedure cover can be availed without getting hospitalized.

Now that you know the thin-line difference between a mediclaim plan and a health insurance plan, it will definitely help you to make the best insurance decision. But, in case you are looking forward to purchasing a mediclaim insurance policy, read on to know more.

Which one should you buy Mediclaim or Health Insurance?

Your decision will depend on several factors such as:

  • Your financial condition
  • Health issues you and your loved ones are dealing with
  • Whether you believe in long term or short term planning
  • Whether you need flexibility in your health plan or not
  • Whether you would need add-on covers and benefits
  • Willing to pay high or low premium

Keep in mind yours or your family member’s age, life stage, and medical condition

Choosing one out of the two is not difficult if you know which one is suitable for you and your family. All the factors that are mentioned above are crucial in deciding the right health insurance policy. If you need more information, you can get in touch with our health insurance team.  

Bottom line

Before you buy a health insurance plan, analyze your insurance expectations and compare various insurance plans that fulfill your insurance expectations. No. 1 health insurance Company in India for you is the one that fulfills your insurance expectations. You can also compare mediclaim insurance at Policybazaar and buy the most suitable plan according to your needs. In the battle of mediclaim Vs. Health insurance there is no winner or loser. Simply put, mediclaim and health insurance are 2 instruments of mitigating health-related risks. Both exist to fulfill the insurance needs of the buyers.

We hope that now you know the difference between a mediclaim plan and a health insurance plan and you will be able to choose the one that suits you better.

Written By: PolicyBazaar - Updated: 01 March 2021
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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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