Differences Between Health Insurance and Medical Insurance


5 min read

Health Insurance vs Medical Insurance – Are They Same?

Is there any difference between health insurance and medical insurance? Do you think both these terms imply the same meaning?  Well, though both these insurances are similar in terms of purpose, but they are different in terms of features. For a novice it might be difficult to decipher the exact usage of any of these plans or to choose between the two plans, if they do not understand them carefully.

Most of the health insurance providers offer two different kinds of products in health insurance, namely:

  • Indemnity Products
  • Benefit Products

Medical insurance is an indemnity product where the actual sum insured is paid by the insurer to a definite limit.

Conversely, the benefit products are those where the amount paid by the insurer is lump sum. For instance, payment in the form of compensation against accidents, critical illness, cashless treatment and so on.

In this write-up, we will discuss the key differences between mediclaim vs health insurance plans.

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Health insurance plans – Know Everything

These plans come with all-inclusive coverage offering protection against in-patient charges of hospital, ambulance charges, room charges, pre as well as post hospital charges, and more. Health plans also cover against critical diseases, pregnancy coverage etc.

6 Types of Health Plans

  • Individual Plans
  • Family Plans
  • Group Health Plans
  • Plans for Senior Citizens
  • Plans against critical illnesses
  • Plans meant especially for certain diseases

Features of Health Insurance Policy

  • Covers in-patient charges for hospitalization
  • Covers both pre-hospitalization as well as post hospitalization charges
  • Offers cashless hospitalization
  • Covers daycare procedures
  • Cover against critical diseases
  • Covers pregnancy and newborn child treatment
  • Offers tax benefits
  • Covers already existing illnesses
  • Offers yearly facility of health check-up

Also Read: Health Insurance for Senior Citizens Above 70 Years

Medical Insurance – Know Everything

As compared to health insurance, medical insurance is restricted in terms of costs covered. Under medical plans, costs for hospitalization is compensated if the insured is hospitalized for 24 hours and beyond. Medical insurances cover with a pre-determined amount against costs incurred during treatment of already existing diseases, accidents etc.

Features of Medical Plans

Some of the features of medical insurance include:

  • Protection against hospitalization costs
  • Protection against emergencies or accidents
  • Protection against some particular diseases

Also Read: IRDA Claim Settlement Ratio 2022

6 Major Differences Between Health Insurance And Medical Insurance

Below are the different categories based on which you can compare health insurance policies to know the difference between health and medical insurance.

Coverage: In Medical insurance, protection against hospitalization (for 24 hours and beyond) is provided for a specific amount against some specific illnesses. It just covers the costs of actual hospitalization and nothing else. On the other hand, Health insurance offer comprehensive protection, which include hospitalization charges, charges against critical diseases, costs of precautionary check-ups, ambulance charges etc.

Benefits: Medical insurance benefits can be availed only when the insured is hospitalized, while in case of Health insurance, benefits can be gained even when the insured is not hospitalized.

Claims: Medical insurance allow to make multiple claims unless the sum insured is over, while in health insurance single claim is generally allowed. For instance, lump sum compensation for critical illness.

Premium payment: In medical insurance, compensation is done in the form of money paid as reimbursement to the policy owner or to the network hospital for cashless claims, while in health insurance the payment is done on lump sum basis for critical illnesses, depending on the policy terms and conditions.

Sum insured: In Medical insurance sum insured is mostly limited to 5 lakh rupees, while in health insurance sum insured can go beyond Crores of rupees.

Rider benefits: Medical insurance allow no add-ons, while Health insurance allow add-ons for pregnancy, accidents, critical diseases etc.

Also Read: Best Maternity Insurance

Health VS Medical Insurance – 4 top advantages and benefits 

Tax Benefit: In terms of tax benefits, both health and medical insurance offer similar advantages under Income Tax’ Section 80D. So, people who are buying insurance for dual benefits of tax and health can choose anyone of the two policies as tax benefits are common to both. But, it is advisable to get an insurance as a monetary protection against medical costs, and not for just saving taxes.

Coverage: When it comes to differences between mediclaim and health insurance in terms of coverage, health insurance policies have an edge over policies of medical insurances. So, if you want to ensure more all-inclusive security for healthcare services, you can opt for health insurances. However, if your healthcare requirements are restricted and are served via medical insurances, in that case you may choose medical insurance plans.

Healthcare Needs: To say the truth, the expenses and needs of a person in terms of health care depends on many factors including past medical conditions prevailing in a family, the way of life of people, already existing diseases, etc.

Finances: When it comes to finances, an all-inclusive health insurance plan is more worthwhile as compared to medical insurance plans. However, the important thing is to a have a certain cover of your health – be it through medical insurance or health insurance. Thus, as per budget you can plan your healthcare insurance purchase. For people with small budget can look for a cost-effective medical policy as they are budget friendly. Conversely, people without any restrictions on finances can have a comprehensive health insurance plan.

Read More: Health Insurance Plans for Senior Citizens

To Conclude

With the rising number of people falling prey to lifestyle diseases as well as other illnesses, it has become imperative for everyone to be concerned about their health and wellbeing. Another issue of concern for everyone, in general, is the growing costs of health care treatments. All this makes it important for everyone to have a good insurance plan, either health insurance or medical insurance to serve your purpose accordingly.

Also Read: Slow Growing Disease List

Understanding the health insurance and medical insurance difference will allow you to choose better protection for you and your family. It will also help you to choose a plan as per your requirements and budget.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

Feb 23, 2022
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PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.

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