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 Difference between mediclaim and health insurance – All you need to know

Opting for health insurance creates financial protection against unforeseen medical emergencies but paying premiums for health insurance can be costly to many. However, it becomes necessary to sign up for a health insurance plan that offers some sort of financial protection.

In such cases mediclaim health insurance policy offers considerable protection against hospitalization expenses. Having said that, one common mistake that people often make is that they think mediclaim and health insurance are the same. However, there exists a major difference between mediclaim and health insurance.

In this article, let us break them down.

Also read: Health insurance: a complete guide

What is Mediclaim?

Mediclaim health insurance policy offers specific financial protection against medical expenses to the policyholders. 

Difference Between Mediclaim and Health insurance

Source: Max Bupa

This mediclaim health insurance plan takes care of the following.

  • Accidental expenses
  • Expenses due to sudden surgery or diseases.

Whatsoever, the coverage is limited to hospitalization expenses, the other expenses are borne by the policyholder itself.

However, the mediclaim insurance policy tends to be a budget friendly health insurance policy.

Features of mediclaim insurance policy

A mediclaim policy works according to these features.

1. Mediclaim policy coverage 

A mediclaim health insurance policy covers hospitalization expenses and medical treatment expenses due to accidents, specific diseases and surgeries. The rest of the expenses are taken care of by the insured.

2. Mediclaim tax benefits

As per section D of the Income tax act of 1961, mediclaim offers certain tax benefits to the policyholder against the premium paid towards it.

3. Mediclaim premium 

A mediclaim premium is calculated based on the factors like sum insured, age of the insured, duration of the plan, gender and geographical location of the policyholder.

4. Mediclaim claim settlement

Mediclaim policy’s claim settlement happens in two ways. It is either a cashless claim settlement or a reimbursement of the claim settlement.

5. Type of plan

There are two types of mediclaim health insurance plans available. Individual and family floater mediclaim. The family floater mediclaim health insurance plan covers the dependent parents, spouse and children.

What is health insurance?

Health insurance is an insurance policy that covers all of the medical and surgical expenses of the insured. It provides complete protection against any medical emergencies. 

Difference Between Mediclaim and Health insurance

Source: Western Slope Now

The insured either pays the medical bills out of his/her hands and the insurer reimburses the bills. Or, the insurer directly settles the bill to the hospital. 

A health insurance policy offers extensive coverage to a policyholder than a mediclaim policy, but it is costlier than a mediclaim health insurance plan.

Also read: Corona kavach policy – all you need to know?

Features of health insurance

These are the features of a health insurance plan. One can also compare two health insurance plans using these features.

1. Health insurance coverage

Health insurance coverage is pretty extensive. It offers you coverage against critical 30+ illnesses. Depending on the sum insured you opt for the coverage can be extended. This has additional advantages on room rent limits, alternative treatment coverage etc.  

2. Copay 

Some of the health insurance plans come with a co-pay option. While opting for copay in  health insurance, the insurance company settles a major percentage of the bill and the policy insured pays the rest. For example, 80% of the medical bills will be settled by the insurance company and the rest 20% is paid by the policyholder. Opting for copay can help you decrease your insurance premium.

3. Health insurance tax benefit

A health insurance plan not only protects you against medical expenses but also offers tax benefits. According to section 80D of the Income tax act of 1961, health insurance offers certain tax deductions.

4. Add on covers in health insurance

One can add certain add on covers in health insurance. They can add-on maternity health insurance coverage, home hospitalization coverage, alternative treatment coverage etc.

5. No claim bonus

For every claim free year, a percentage of sum insured increases upto a certain limit and this is known as no claim bonus. This is added every year during the time of policy renewal.

6. Annual health check up

Most health insurance plans offer annual health check ups every year during the time of policy renewal. This can be applicable for the policyholder as well as the dependents depending upon the plan opted.

Difference between mediclaim and health insurance – a comparison chart

Based on the features and benefits, here is a comparison chart on the difference between mediclaim and health insurance.

Mediclaim policy

Health insurance policy

Mediclaim policy offers protection against hospitalization expenses and expenses due to accidents, certain illnesses and surgery. A health insurance policy offers comprehensive protection against most hospitalization expenses and other medical bills. 
Mediclaim does not have any add-on covers to it. There are add-on covers on health insurance like maternity health insurance, alternative treatment coverage etc.
A mediclaim has no flexibility in coverage Health insurance coverage is highly flexible based on the plan we opt for. 
In a mediclaim policy the sum insured does not exceed 5 lakhs.  In a health insurance policy, the sum insured can start from 3 lakhs and can even go upto 1 crore or more.

Also read: Difference between health insurance and term insurance

Which is Better: Mediclaim or Health Insurance?

Difference Between Mediclaim and Health insurance

Source : Bajaj Allianz

In order to answer the question, ‘which is better: mediclaim or health insurance?’ we will have to consider several factors like

  • Current financial situation
  • Flexibility required in a health plan
  • Our medical history and medical condition of the dependents
  • Will we require any add-on covers in the future?

After considering the following factors, and the insured’s expectations, one can choose between a mediclaim and a health insurance policy. 

As both fulfil the basic needs of a health insurance plan, opt for that plan that fulfils your requirements and expectations.

 

Do you wish to provide an employee benefits package for your employees that include both group health insurance and mental wellness program?  Contact us for more information.

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