How is a health insurance plan different from mediclaim policy?

Today, when COVID-19 has caused a huge dent in the economy, people are equally worried about their health and financial safety. Building your immunity and fighting COVID-19 has been the priority of every individual. During such times it is significant for everyone to have a health insurance plan in combination with a Mediclaim policy. This helps protect an individual’s life and wealth too. 

However, do you know that these two are separate types of policies even though they are often used interchangeably?

People usually confuse between the two terms of the health insurance plans and Mediclaim. It is essential to understand these differences in depth for a better selection process. 

Mediclaim 

A Mediclaim is an insurance policy which protects an individual from the costs incurred by him / her towards hospitalization. An individual who is facing a small to mid-sized problems such as accidents, a type of illness, doctor/nurse charges, occupational therapist and so on can be addressed with a Mediclaim policy. A Mediclaim allows the policyholder to get the reimbursement of these expenses and it can also be in cashless format. 

Features of a Mediclaim policy

  • A Mediclaim is valid only if the Mediclaim holder is admitted in a hospital for more than 24 hours.
  • Covers the cost of before and after the actual hospitalization period.
  • Minimum age to purchase a Mediclaim policy is five years of age. 
  • Validity of a Mediclaim policy is one year and renewed annually. 
  • Helps an individual get cashless treatment.
  • If a person goes out of their home country where the policy is purchased for special treatment, it cannot be claimed under Mediclaim.
  • Unproven treatment, home remedies, etc. creating side effects and thus leading to hospitalization will also not be covered under Mediclaim. 

Health Insurance policy

A health insurance policy as an insurance product; on the other hand, is a more complete and comprehensive health insurance policy. It covers all medical and surgical expenses under its ambit. The insurer reimburses the hospital bills to an individual directly or to the hospital. Health insurances are more comprehensive than that of Mediclaim and that is the essential difference. The benefits received through a health insurance policy are much broader than the basic Mediclaim benefits offered. In simple terms, health insurance provides risk coverage against any unforeseen medical emergencies and in turn, covers the expenditure. 

Features of a Health Insurance policy

  1. A health insurance policy covers life-threatening diseases. 
  2. Reimbursement of any money spent pre or post-hospitalization.
  3. A baby of 3 to 5 months can also be covered concurrently with the parent. 
  4. Health insurance also covers pre-existing ailments
  5. There are no mandatory medical checkups to check the pre-existing medical condition of an individual below the age of 45 years. 
  6. A health insurance policy provides co-payment discounts, i.e. the insurance company and the insured contribute a specific amount for the payment of the premiums. The ratio is pre-decided.

Similarities between Health Insurance policy and a Mediclaim policy

  • Cashless Procedure

Both policies offer cashless services if an individual is hospitalized for more than 24 hours. Cashless facility is a no-cash-outflow policy for the insured and proves to be a boon in times of crisis. 

  • Tax Benefit

While filing income tax returns, the amount spent on Mediclaim and health insurance shall be eligible for exemption under Section 80D of the Income Tax Act Rs.100,000. Then this amount will be subtracted from the earnings, and accordingly, the tax payable amount will get reduced proportionately.

  • Pre and Post-hospitalization costs

Any money spent before admitting the patient to a hospital such as antibiotics, ambulance charges, etc.; these are also covered under these policies. Money spent after the discharge of the patient such as checkups, tablets, etc will also be protected.

  • Medical Checkups

Certain policy providers do give the insured the benefits of having yearly full-body checkups. This helps the insurer to also know and stay updated about the health of the insured.

  • Types of Policies

Both Mediclaim and health insurance providers offer various schemes with certain specialized benefits. Family floater scheme is available on both Mediclaim and health insurance policies.

  • Pre-existing medical condition

An individual while purchasing a policy has to provide information about his/her health and mention if they suffer from any particular disease. 

Differences between Health Insurance policy and a Mediclaim

The FactorMEDICLAIMHEALTH INSURANCE
HospitalizationProvides only hospitalization expenses.Provides additional expenses with hospitalization expenses like ambulance charges etc.
CoverageIt only covers small to mid-sized problems/illness.It covers small to large/serious illness.
AmountThe maximum amount which can be claimed in Mediclaim is limited to Rs.5 lakhs.An individual can get 100% reimbursement or Rs. 1 crore, whichever is lower.
No. of ClaimsA Mediclaim can be claimed more than once.Health insurance can be claimed only once.
Sum assuredThe sum assured is pre-decided and fixed.The sum assured is 100% as long as it is less than Rs.1 crore.
FlexibilityThere is no flexibility in the policies offered. In health insurance, the policies are flexible and can be customised.
Add-onsThe policy does not come with optional add-ons.The policy comes with optional add-ons such as accidental disability, maternity benefit, etc.

When you go out to buy health cover, it is important to know the subtle differences between Mediclaim and health cover. Keeping in mind all the points, features, similarities, dissimilarities, and some of the answers collected through public domain will help you as an individual to decide if you need a Mediclaim or health insurance. That is an important choice to make.

FAQs: Mediclaim Policy vs Health Insurance Policy

Why are Mediclaim and health insurance terms used interchangeably?

No website provides a perfect definition of both these terms anywhere. You can only understand these things once you dive deeper into the subject or discuss it with the insurance agent in a more focused manner. The primary function of these policies works in the general interest of providing health safety. Having quite a number of similarities and a few specific differences, it makes it more difficult for an individual to grasp the thin line of difference and thus unknowingly use these terms interchangeably.

Lack of complete knowledge about these policies and products is one of the key reasons for using these terminologies interchangeably in the general vocabulary. These both terms have a slight difference. If an individual Googles about Mediclaim, he/she is also confused as most of the search results give out the response about health insurances. And for that matter, people are misguided and tend to use these terms interchangeably.

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