Health Insurance and Mediclaim – Are they different?
People often get confused about health insurance and mediclaim. Frequently used interchangeably, both the terms are different from each other. Buying any insurance plan, whether it is a health insurance plan or any other insurance plan, can be a complex task, especially for a first timer.
Not all are aware of terminologies related to insurance, the ways to go about buying an insurance plan, renewing a health insurance, or knowing the difference between health insurance and mediclaim for that matter. Where mediclaim is restricted to hospitalization expenses, health insurance offers far more comprehensive cover from critical illnesses and other medical emergencies.
To help you understand better, here is a detailed lowdown on how health insurance is different from mediclaim:
What is Health Insurance?
In the simplest of terms, a health insurance policy covers an insured individual’s medical expenses. To further elaborate, a health insurance plan allows an individual to either pay the costs of any medical expense out of pocket and then gets it reimbursed, or the insurer makes payments directly to the health service provider which is termed as cashless health insurance.
Having health insurance offers benefits and the much-needed financial support as and when medical emergencies arise. To further make it easier for people to buy a health insurance plan based on their needs and preferences, health insurance is classified in the following categories:
- Individual Health Insurance Policy
- Family Floater Policy
Some Features of a Health Insurance Plan:
A. Coverage: A health insurance plan offers comprehensive coverage, including cover for more than 30 critical illnesses. However, based on the different insurer’s policy, critical illnesses are not a part of a basic health plan; it can be chosen as an additional cover.
B. No Claim Bonus: An additional feature of buying health insurance is No Claim Bonus (NCB) which is accrued at the time of renewal after the end of a claim-free year. With NCB, you get relief in your premium to some extent.
C Co-payment: Some health insurance policies have an option of co-payment. It helps to decrease the as an Insurance Premium particular percentage of the treatment expense is paid by the insured individual, and the rest of the balance is paid by the insurance company.
D Tax Benefits: Under the section 80D of the Income Tax Act, a health insurance plan offers tax benefits.
What is Mediclaim?
Mediclaim, on the other hand, offers a pre-specified sum of financial cover to the insured against medical expenses. However, mediclaim offers only hospitalization expenses, while any other medical expense is to be paid by the insured individual.
Having a mediclaim policy has its own set of benefits, including coverage for hospitalization and medical emergencies arising out of critical illnesses. Just like general health insurance, mediclaim policies are categorized based on an individual’s needs and preferences.
- Individual Plan
- Family Floater Plan
Features of Mediclaim:
- Coverage: A mediclaim policy offers coverage against hospitalization expenses, treatment expenses due to an accident and/or specific diseases.
- Pre-specified Sum Assured: Mediclaim comes with coverage of pre-decided sum assured.
- Premium Affecting Factors: A mediclaim plan’s premium is based on different factors, such as the sum insured, gender, the proposer’s age, geographical location, and the duration of the plan.
- Claim Settlement: A mediclaim claim can be processed in the form of reimbursement, as well as cashless treatment.
- Tax Exemption: The plan offers tax benefit as per Section 80D of IT Act 1961.
Health insurance and mediclaim are different. Health insurance offers comprehensive cover from hospitalization expenses, pre-hospitalization charges, post-hospitalization charges, and ambulance expenses. It also offers compensation for the loss of income resulting from an accident. While a mediclaim provides cover only from hospitalization, accident-related treatments, and specified diseases for a pre-decided sum assured.
Emergencies can arise unexpectedly, and thus it is important for anyone to stay prepared. Buying a health insurance plan enables a person to stay prepared for the unexpected medical emergency. An individual may choose between health insurance and mediclaim, based on his/her needs and preferences.