health insurance vs medical insurance

Health Insurance vs Medical Insurance – How To Choose Between The Two

Health insurance vs medical insurance – did you think these are two names for the same insurance product? Even though the purpose of both these products may be similar, they are both different and have different features. One should carefully choose between these two depending on one’s healthcare requirements.

Health insurance companies offer two types of health insurance products: 

1.    Indemnity products

2.    Benefit products

Indemnity insurance pays the actual amount up to a certain limit. Medical insurance is a kind of indemnity insurance. Benefit products are those that pay a lump sum amount, such as in the case of critical illness insurance, accidents and hospital cash. 

Let’s look at what both these types of insurance plan cover, individually. 

Health insurance

Health insurance plans offer comprehensive coverage: hospitalization, pre and post hospitalization, ambulance and room rent, and more. Health insurance coverage even extends to critical illnesses, maternity coverage and more.

Types of health insurance plans

  • Individual
  • Family floater
  • Group health insurance
  • Senior citizens health insurance
  • Critical illness health insurance
  • Specific disease health insurance
  • Common coverage features

    • In-patient hospitalization coverage
  • Pre and post hospitalization coverage
  • Cashless facility
  • Daycare treatments
  • Coverage for critical illnesses
  • Maternity and newborn baby coverage
  • Tax benefits
  • Pre-existing disease coverage
  • Annual health check-up facility
  •  

    Medical insurance

    Medical insurance is limited in the expenses it covers compared to health insurance. Under medical insurance, only hospitalization expenses are covered provided the policyholder is hospitalized for at least 24 hours. It provides treatment towards pre-specified illnesses, and accidents for a pre-specified or limited amount.

    Common coverage features

    • Coverage against hospitalization expenses
  • Accident and emergency related hospitalization
  • Specific illness
  •  

    Key differences – health insurance vs medical insurance

    Medical InsuranceHealth Insurance
      
    Medical insurance provides hospitalization coverage (provided hospitalized for at least 24 hours), specific diseases and specified amount. It does not cover any expense other than actual hospitalization expenses.Health insurance provides comprehensive coverage – hospitalization, critical illness, preventive health check up, ambulance and more
    To avail the benefits of medical insurance, hospitalization is a mustHealth insurance benefits can be availed without hospitalization
    Allows multiple claims till sum insured gets exhaustedUsually single claim, e.g. in the case of critical illness for a lump sum amount
    Payments are either reimbursed to the policyholder or paid to the hospital in case of cashless methodPayment is either reimbursed to the policyholder, or paid to the hospital in case of cashless method, or paid in lump sum in cases such as critical illness, specific illness policies, etc.
    Sum insured is usually limited to Rs 5 lakhsSum insured can be higher up to a few crores
    Medical insurance does not allow coverage extensions and add-ons.Health insurance offers add-ons for various healthcare needs such as maternity, accidents, critical illness, etc.

     

    Health insurance vs medical insurance – how to choose between the two?

    Tax benefit: One of the few similarities between medical and health insurance is the tax benefits. Both types of plans provide benefits under Section 80D. Those who want to buy insurance for the purpose of availing of tax benefits, could choose any – health or medical insurance. However, it is best to buy any insurance plan as financial security against medical expenses, not just as a tax-saving tool.

    Coverage: Health insurance provides a wider coverage compared to medical insurance. Those who want to ensure a more comprehensive protection towards healthcare should opt for health insurance. Those whose healthcare needs are limited to the coverage offered under medical insurance policies, should choose medical insurance plans.

    Healthcare needs: The kind of plan that one must choose, depends on one’s personal health care needs. This, in turn, depends on factors such as family medical history, lifestyle, pre-existing diseases and more.

    Budget: Even though a comprehensive health insurance plan would be more beneficial, it is better to have some kind of healthcare protection. Hence, those with a smaller budget could opt for a medical policy, which is more cost effective compared to health insurance.

    An increasing number of people are falling ill due to lifestyle, pollution, air-borne diseases, contagious viruses. Health safety of self and family is a key concern for everybody. Moreover, the rising costs of medical care leads to the need for ensuring enough financial security towards healthcare expenses. Choosing a good health insurance or medical insurance can take care of these health concerns. 

     

    FAQs: Health Insurance vs Medical Insurance

    What is the difference between health insurance and mediclaim?

    While both are often used interchangeably, there are differences between the two:
    Mediclaim insurance provides limited coverage: for hospitalization of over 24 hours, specific diseases and specified amount. Health insurance provides comprehensive coverage – hospitalization, critical illness, preventive health check up, add-ons, ambulance and more.

    Do health insurance and mediclaim offer the same coverage?

    No, the coverage offered by both these plans differs. While mediclaim insurance offers coverage for domiciliary care and hospitalization expenses incurred during hospitalization of at least 24 hours, health insurance provides comprehensive coverage such as pre and post hospitalization, critical illness, day care treatments, OPD expenses, alternative medicine and maternity, among others.

    Do mediclaim and health insurance plans offer the same kind of flexibility?

    No, mediclaim and health insurance do not have the same kind of flexibility features. Mediclaim is limited in coverage and flexibility, whereas health insurance plans provide more flexibility such as customizing the plan, portability and more.

    Is cashless claim facility available in both mediclaim and health insurance?

    Yes, both mediclaim and health insurance plans provide cashless claim facility depending on the plan chosen.

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