Difference Between Mediclaim Insurance and Health Insurance Plans

5 min read

What is the Difference Between Mediclaim and Health Insurance

There are no doubts about the need to take care of your health, particularly at a moment when people around the world are still recovering from the effects of a devastating pandemic. In India, the awareness surrounding health insurance plans has increased in the recent years. However, there is a common perception among the population on the difference between mediclaim and health insurance since they sound alike. In reality, both are distinct products that are used in different situations. To make them more transparent and to help you select the appropriate policy, let’s us try to throw some light on the mediclaim vs. health insurance debate that has been going on for a long time.

What is a Mediclaim Policy?

Mediclaim meaning Mediclaim insurance, is a kind of health insurance policy that helps reduce your costs by offering coverage to cover hospitalization costs for general ailments. In addition, it typically covers diagnostics reports, consultations of doctors with discharge certificates and treatment costs, medical bills, etc. It is also possible to get an exclusive Mediclaim policy for all members in your family, such as the spouse and children and parents as well as other members, for a specified amount, as it protects your whole family. In addition, it also provides tax benefits by Section 80D under the Income Tax Act, similar to the deductions that are available for premiums paid for insurance.

How does health insurance work?

A health insurance policy is a kind of medical insurance that may be accessed either by a group or an individual to safeguard against growing medical costs. In this case, the insured gets reimbursed for hospitalization costs or receives cashless services when admitted to one of the hospitals within the network of the insurer. You can also choose the family floater health insurance that provides all-inclusive health insurance for all members of the family at a low cost. Because there is more coverage in the health insurance policy than a mediclaim insurance policy, it is more comprehensive.

Difference between Mediclaim & Health Insurance

To get a better understanding of what a Mediclaim as well as a health insurance plan is, we can discuss the difference between health insurance and medical insurance, which will assist you in deciding which one is the best to purchase.

  1. Sum Insured: In Mediclaim policies, the sum insured is not unlimited and is limited to a sum of Rs. 5 lakhs only. However, this cap doesn’t apply to health insurance plans. The sum insured value is limited and capped in a mediclaim insurance policy, but you can choose to increase the sum insured according to the requirements and needs in a health insurance plan. This makes it a suitable policy that can cover procedures with high costs that are not feasible with a mediclaim insurance policy.
  2. Coverage: In a mediclaim policy, the coverage is provided only for the hospitalization expenses, but on the other hand, a health insurance policy offers coverage over expenses related to hospitalization – pre and post, ambulance costs, medical consumables, diagnostic costs, etc., as per the plan chosen by the policyholder, which are also based on the terms and conditions of the plan. To avail these benefits of a Mediclaim policy, an individual must be first get admitted to a hospital. However, this is not required for health insurance since the coverage covers treatments that are performed at home in situations when hospitalization isn’t possible.
  3. Add-ons: Adding or extending the existing insurance policy with more options is possible in a health insurance plan through addons or riders. Critical illness coverage or personal accident coverage, accidental disability policy, maternity coverage, etc., are some of the popular riders that can be attached to a single policy. Unfortunately, the ability to extend the coverage isn’t included in a mediclaim plan, which is a disadvantage should you wish to extend the coverage of the chosen plan.
  4. Customisations: Mediclaim policies are not flexible. It is very simplistic, and one must be content with what is provided by the insurer, without any possibility to extend their features. The mediclaim policy given to employees by the employer falls into this class. However, the health insurance policy provides a variety of customization options that allow you to pick the duration, premium payment frequency, as well as many other options that are included in the plan, making it highly flexible.
  5. Claim Settlement: In a health insurance policy, the claim settlement process is very easy compared to a mediclaim policy since the health insurers use third-party administrators for claim settlement, something that isn’t the case with Mediclaim policies. Mediclaim permits reimbursement costs of hospitalization up to a certain amount to be paid. However, it wouldn’t cover other expenses related to treatment. Health insurance, however, provides a lump sum payment at a given time and includes the bulk of the expenses that occur in hospitalization. In regards to claim settlement in the present, many health insurers allow claims several times throughout the year, outpatient department charges, and daily cash payments during hospitalization and other benefits, which make it more worthy than Mediclaim.
  6. Tax Exemptions: When deciding between Mediclaim policies vs. health insurance, the tax benefits provided by each plan are also crucial since we receive benefits in the form of IT rebates. If you purchase an insurance policy for health, you can avail of tax advantages with section 80D up to Rs. 25,000. This is available on the amount paid for health insurance for oneself, family members, spouses, and children. This exemption limit can reach up to 75,000 under a health insurance policy, while in the case of Mediclaim policies, a tax exemption up to a max of Rs. 15,000 only is available on the amount of premium paid.

Also Read: List of Cheapest Health Insurance in India for 2022

e have tried to look into the difference between health insurance vs medical insurance to help you choose between mediclaim or health insurance and which one can be more beneficial. While both serve its purpose, it is the responsibility of the buyer to evaluate their requirements and select the one that is best suited for their needs. As the amount of lifestyle diseases is growing each day, we have a responsibility to safeguard ourselves and our family members in case of a medical crisis. If it is necessary to go to the hospital and avail treatment, it is imperative to possess a solid insurance plan in hand so that you don’t burn your pocket. And yes, the experts at PayBima can help you decide what mediclaim policy would best suit your needs.

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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