What is Mediclaim ? What is health insurance ? Mediclaim vs Health Insurance

How is a health insurance plan different from mediclaim policy?

Lot of individuals subscribe to mediclaim policies in the belief that they have adequate health insurance to address all health issues. This is not only inaccurate but might just prove a very costly oversight.

To be sure, mediclaim although a form of health insurance is far from adequate to cover the many illnesses and health conditions that have become so common given the stress and mishaps in everyday life.

Mediclaim

First let’s understand what mediclaim brings to the table.

The key feature of mediclaim is cover for hospitalization and treatment towards accident and pre-specified illnesses for a specific sum assured limit. The mediclaim premium is based on the sum assured.

The amount paid towards mediclaim premium for self/spouse/children provides tax exemption under section 80D for a maximum of Rs 15,000 with another Rs 15,000 benefit on mediclaim premium for parents (Rs 20,000 if parents are senior citizens). Although, not advisable, mediclaim must not be taken for the tax benefit, else it degenerates into a tax saving investment, rather than a lifeline for yourself and your family.

Health Insurance

Health insurance, particularly the ones launched by life insurance companies, can be a lot more broad-based than mediclaim.

Some features of health insurance plans include:

Comprehensive health cover against critical Illnesses –as many as 30 illnesses in certain plans

Discount on premium if sum assured exceeds a particular limit like Rs 10 lakhs for instance

Flexibility to reduce premium after a specified period

Flexibility to reduce sum assured after a specified period

Flexibility to reduce policy term after a specified period

Health insurance premium provide tax exemption under section 80D of Income Tax Act 1961, this being one of the few meeting points between health insurance and mediclaim

Evidently health insurance plans are far superior to mediclaim in terms of breadth of diseases and illnesses covered, quantum of sum assured and flexibility. While mediclaim may prove adequate up to a point, it is health insurance that can be expected to bail you out from an expensive medical condition.

Mediclaim vs Health Insurance 

Health insurance has become a necessity in these times as the cost of treatment of illnesses at hospitals has skyrocketed. Though people who are young and healthy think of health insurance as wastage of money, one never knows when a critical illness, accident or medical emergency may suddenly arise. And just because one is healthy at present is no guarantee of no illness in future also. This is why more and more people have started to buy health insurance policies apart from insuring their lives. There is another policy by insurance companies that is gaining currency and is called Mediclaim.

Let us find out if there are any differences between Mediclaim and health insurance.

• First of all, health insurance is not a kind of insurance where you can expect any benefits if do not fall ill and do not make claim during the policy period. It is like having a financial protection in case you fall ill as your medical expenses are covered by the policy up to the amount that is specified in the policy. Mediclaim is a type of health insurance policy that differs on a number of respects.

• Mediclaim especially mentions the critical illnesses that you are protected from and provides all expenses for hospitalization and drug expenses for the illness if you happen to contract any of them. Health insurance policy on the other hand, is more for post hospitalization expenditure and the loss of income that may arise out of illness.

• While Mediclaim policies are for a period of one year and one has to get the policy renewed for another year, general health insurance policies are for 3-5 years. There are also differences in the rate of premiums of both the policies. The premiums of Mediclaim are higher than that of general health insurance policies.

• Another difference pertains to claims made under these policies. While you can make several claims under Mediclaim until you have exhausted the sum assured, in the case of a general health insurance policy, the policy is closed once you make a claim and the entire amount that is assured to you has been paid out.

• Mediclaim policies have a wider coverage than health insurance policies and have more types of illnesses and ailments listed in the policy that you are protected against. Service providers allow for cashless hospitalization where you do not need to pay a dime whereas there is no such provision in case of health insurance policies and you may have to wait for disbursal of the claim you make.