Mediclaim and health insurance are connected, but they are two separate terms. Health insurance is a major type of insurance, while Mediclaim is a subset of health insurance.
Both are equally important to ensure you and your loved ones do not suffer from mounting financial burdens when you have medical bills to pay in case of an unfortunate event. It is important to understand the difference between health insurance and mediclaim to make the right health insurance policy choice.
What is the difference between Mediclaim and health insurance?
Understanding the difference between Mediclaim and health insurance is crucial for deciding which plan to purchase for maximum coverage that suits your requirements. Mediclaim generally covers hospitalization expenses, while health insurance covers a wide range of expenses; like surgery expenses to disability. The factors to consider when choosing either of the two options are as follows.
Financial status
Considering your current financial status and how much you are likely to earn in the coming months, you can choose a plan. If your salary is likely to increase, select the health insurance that provides better security.
Current health condition
You should consider your health condition and that of your dependents to get the perfect insurance plan that suits your needs. Does anyone have an ailment at present? Is everyone fit and healthy in the family?
Family history of health disorders
If you have a family history of certain health disorders, you can also get them eventually. In this case, getting a cover for the particular disease is a good choice. It makes you financially protected if diagnosed with it in the future.
Short and long-term goals
Some individuals like to plan for the short term while some plan for long-term insurance. You need to determine the type of planning you are doing and then choose between Mediclaim and health insurance plans.
Plan flexibility
Health insurance is vast in comparison to Mediclaim and it also provides better plan flexibility. How much flexibility do you want in the plan? Do you think you may want to make changes in the future? Or do you want a more definite insurance plan?
Add-on requirements
You must determine the add-on covers and whether you may want those. Add-ons or riders improve the cover of the policy by adding an essential cover to your existing policy. The benefit of add-ons is that you can add as many riders as you wish.
What is Mediclaim?
Mediclaim is a form of health insurance that is used to cover expenses incurred due to the hospitalization of the insured individual. The policyholder may have been hospitalized because he suffered from an accident, had surgery, suddenly fell ill, or had to undergo emergency surgery. Mediclaim does not cover other costs of treatment such as rehabilitation, diagnostic tests, check-ups, etc.
The Mediclaim benefits include coverage of hospitalization expenses which can be quite high. It acts as a financial cushion for the insured person. It is cheaper than health insurance policies. As treatment costs are rising, especially that of hospitalization, the policy can save the insured person from paying out of pocket. Another one of the benefits of a medical insurance policy is that the policyholder can choose between a cashless policy for more convenience and a reimbursement policy.
Types of Mediclaim Policies
The two types of Mediclaim policies are as follows.
Cashless
The cashless Mediclaim policy is where the insurance company pays the hospital directly or through a third-party person for the hospitalization expenses of the insured person. The policyholder is required to submit a claim form and report to first get approval and then get the cashless treatment.
Reimbursement
This requires the policyholder to pay out-of-pocket first and then settle the expenses with the insurance provider later. The policyholder must provide all the required documents such as bills, receipts, the claim form, the doctor’s report, prescriptions, a medical form signed by a doctor, and so on.
Who should opt for a Mediclaim policy?
A person who is in perfect health and is young can opt for a Mediclaim policy as long as the main requirement is to get hospitalization-related expenses covered. A person who is likely to suffer from accidents due to their nature of work should get this policy as it is focused on hospitalization charges. Note that to get an extensive Mediclaim policy, the policyholder must ensure that various aspects are included in the policy.
What is Health Insurance?
Let us begin by understanding what is health insurance and what health insurance covers. Health insurance is an umbrella term used to describe insurance that covers a wide range of surgical and medical costs when emergencies occur. The policyholder can opt for cashless treatment or reimbursement options like in the case of Mediclaim policies. Health insurance is more expensive than Mediclaim as it provides better coverage.
A health insurance policy also provides cover for various types of ailments and diseases provided it is mentioned in the plan. The health insurance policy may exclude certain types of medical procedures though. When selecting a health insurance policy, the person should consider their age, medical conditions, and financial standing. He should also consider the same for his family members when opting for family floater health insurance plans.
Read More: Benefits of Health Insurance
When comparing Mediclaim vs health insurance, the latter has more advantages. Health insurance provides comprehensive coverage to the policyholder. It enables the policyholder to add riders based on their requirements which further broadens security. It is possible to buy cover for a particular disease or a particular event such as the birth of a baby. A health insurance plan is suitable for people of all ages as it safeguards from the mountain of medical expenses.
Who should opt for a health insurance plan?
Some individuals are more prone to catching a particular ailment than others. This may be due to a family history of such diseases or because of their lifestyle choices. Anyone who thinks they may get a critical illness in the near or distant future should get a health insurance plan otherwise they will be financially drained pretty quickly. A health insurance policy is recommended for everyone because when purchased early, it has lower premiums.
Health can deteriorate at any time and being prepared in advance is key to mitigating financial problems later in life. With a good health insurance policy, the policyholder can keep their finances secure and get timely treatment without worrying about the financial aspect of it all. As an increasing number of health insurance providers are covering AYUSH treatments, which are alternative forms of treatments, getting a health insurance policy is beneficial.
Types of health insurance policies
There are many types of health insurance plans in existence but they can be categorized into two types.
Indemnity health insurance plans
These plans allow the policyholder to claim medical expenses up to a maximum limit that is mentioned in the health insurance policy either through a cashless payment option or reimbursement. These plans help to drive the out-of-pocket costs down and enable the policyholder to better manage their money in a time of ever-increasing medical and surgery costs. Mediclaim insurance, ULIPs, individual insurance, and family floater insurance policies come in this category of health insurance plans.
Definite benefit health insurance plans
These types of health insurance plans depend on when a medical event occurs and pay accordingly. For example, the policyholder will get a lump sum amount when he is diagnosed with a certain illness or when he has an accident. Definite benefit health insurance plans include maternity plans, personal accident, and critical illness policies. They are the more expensive ones compared to indemnity health insurance plans.
Difference between Mediclaim and health insurance
The Mediclaim vs health insurance differences are as follows:
| Mediclaim | Health insurance | |
| Coverage | Mediclaim provides cover for hospitalization-related expenses, pre-existing health conditions, and any accident-related treatment up to a specified limit. | On the other hand, health insurance provides extensive and comprehensive coverage which includes a vast range of expenses including ambulance fees, pre-hospitalization fees, post-hospitalization expenses, and compensation in the case of loss of income due to an accident. |
| Principle | The principle of indemnity is applied in Mediclaim. This is why the policyholder can only claim a refund after he has been hospitalized. | Health insurance is based on the principle of benefit. This means if the policyholder falls ill due to any of the listed diseases in his policy, he will receive a lump sum for the treatment. This is also applicable if he becomes partially or disabled due to an accident. |
| Hospitalization | Mediclaim plans are solely focused on covering the hospitalization charges and expenses incurred after being hospitalized. Even though this is of substantial help, it is limited thereby not covering the before and after hospitalization costs. | Health insurance plans provide the policyholder with cover for pre-hospitalization charges and post-hospitalization expenses too. They also include daycare treatments given to the policyholder making them much broader and more convenient for the policyholder. |
| Sum insured | Typically, in India, the sum insured for Mediclaim policies is up to Rs. 5 lakhs. | The sum insured by a health insurance policy can vary depending on the insurance provider. It can start from Rs. 50,000 and go up to a few crores such as Rs. 6 crores per year. A health insurance policy provides a much higher sum insured thereby ensuring better financial aid in comparison to Mediclaim policies. |
| Claims | The policyholder can claim multiple times when he purchases a Mediclaim policy until the amount insured is exhausted. | In health insurance, the policyholder can file claims as long as the sum insured is not exhausted. The policyholder will receive a lump sum if he has an accident or has a disability because of it or has a critical illness that he is suffering from. These types of claims can be made just once for the duration of the health insurance policy. |
| Flexibility | Mediclaim is a rigid type of health insurance plan because you cannot make any changes once the plan has been purchased. | Health insurance offers higher flexibility as you can add and remove covers as you need as specified in the policy. You can also change the policy duration thereby lowering the premium that you need to pay to the insurance provider. Long-term health insurance policies offer lower premiums. |
| Add-on covers | When you purchase a Mediclaim plan, you will not get the option of add-ons. | You can add as many riders as you wish thereby providing better cover in a variety of instances that can potentially occur. |
| Cost | The cost of the Mediclaim policy is fixed when the policyholder purchases it. There are no changes to the cost over the years that the policy has been purchased for. | The cost of health insurance can increase or decrease. For instance, the policyholder can avail of discounts if he makes no claims during the policy tenure. He can also get long-term policies that will be cheaper in comparison to short-term policies. |
| Floater coverage | Mediclaim policies often do not include floater cover which means the policyholder cannot add more people such as parents, spouses, and children to the same policy. Some insurance providers can provide floater coverage though so it depends on the insurance company. | In health insurance, all insurance providers allow for floater coverage which means a single policy covers the policyholder and all his family members. |
Summing Up
Now that you understand the health insurance and Mediclaim meaning, you can decide which plan to get. While Mediclaim is restricted, health insurance is more comprehensive, providing better financial protection in the case of medical emergencies. If you want better safety and flexibility, a health insurance policy is the plan to choose as you can add riders of your choice to widen the protection provided. The earlier a health insurance policy is purchased, the better.
Read more: How to become health insurance agent?
