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Here’s the Difference between Health Insurance and Mediclaim

Imagine you’re looking for a job change. You get an interview call for a job. What will be your plan of action? Will you get your resume ready and prepare for the interview or you will try to extract all the possible information about the job profile and the company profile including the strength of its workforce, its financial health, your job description etc?

Most of the people go for the latter approach first then follow it up with the former approach.  It is a systematic way of approaching. Now, replace this situation with buying health insurance. Would you like to know what your plan is and what it has to offer or would you just go ahead and buy a plan that you have just come across?

Even if you’re buying a plan from the best health insurance company in India, if you don’t know what exactly it has to offer, it is of no use to you.  While buying health insurance, people make various mistakes. One of the most common mistakes is assuming mediclaim is a synonym of health insurance. Mediclaim and health insurance plans have their own different definitions. It’s high time we address this issue. That’s why; we have come up with this article. In this article, we’ll tell you how mediclaim is different from health insurance.

But before we get to the point, let’s first talk about what is mediclaim insurance and what is health insurance.

What is Mediclaim Insurance?

Mediclaim insurance is a type of insurance that offers specified financial protection against health-related expenses. It is a pocket-friendly way to mitigate any health-related emergency. However, the coverage is limited to hospitalization and other expenses are to be borne by the insured himself. 

How Does a Mediclaim Insurance Plan Work in India?

Here are the Features of Mediclaim Insurance Plan.

  1. Coverage - A mediclaim health insurance provides insurance coverage against hospitalization expenses, treatment expenses due to an accident and specific diseases.
  2. Sum Assured - Generally, it comes with a pre-decided sum assured.
  3. Premium Affecting Factors - A mediclaim insurance plan’s premium is formulated on the basis of the sum insured, the proposer’s age, gender, geographical location and opted duration of the preferred plan.
  4. Claim Settlement - A mediclaim claim is processed in the form of reimbursement as well as cashless treatment.
  5. 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.
  6. Tax Exemption - The plan offers tax benefit as per Section 80D of IT Act 1961.

What is Health Insurance?

Health insurance covers the cost of medical and surgical expenses incurred by the insured. The insured either has to pay such expenses out-of-pocket and is later reimbursed by the insurer or the insurance company settles the bill directly with the hospital. The benefit and features so provided, are subject to the terms and conditions of the insurance policy. The cover, most of the times, is extensive and is usually more expensive than a Mediclaim Policy.

How does a Health Insurance Plan Works in India?

Here are the Features of Health Insurance Plan.

  1. Coverage- Health insurance plan offers comprehensive insurance coverage, including critical illness cover for up to 30 plus illnesses.
    Note - 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.
  2. Renewal Discounts- 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.
  3. Co-payment- A few health insurance policies come with an option of co-payment. It helps 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.
  4. Tax Benefits- Under section 80 D of the income tax act, a health insurance plan offers tax benefits.

What is the Difference Between Mediclaim Insurance and Health Insurance?

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

Health Insurance vs Mediclaim

S.No

Basis

Mediclaim

Health insurance

1. 

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.

2. 

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.

3. 

Flexibility

When it comes to coverage, it offers no flexibility. 

On the other hand, a health insurance plan offers the 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.

4.

Plan Features

Features of a mediclaim plan vary 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 is same over most insurance providers.

5. 

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.

6. 

Sum Assured

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.

7. 

Claims

In 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 assured sum is paid in lump sum.

Ergo, 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.

8.

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 daycare 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 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 type of insurance plans.

Final Words

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.