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Difference Between Health Insurance and Mediclaim

Published On Oct 09, 2020 5:30 AM By Sakshi Aggarwal

With the ever-increasing uncertainties related to health and sickness, it is considered wise to have a health insurance cover. One cannot plan or predict when they can fall sick so why not be prepared for its financial aspect. With the increasing prices of healthcare and increasing instances of diseases, it is always better to plan for your future medical needs so that you and your family can stay stress-free. 

Now, while talking about health insurance, what comes immediately to our mind is a Mediclaim policy. We often use Health Insurance and Mediclaim Policy interchangeably, while both of them are largely different from each other. With this article, we will try to clear out the ambiguity surrounding these two products, so that you end up choosing the product that suits your family needs the best. 

Firstly, let us try to understand per se, what the definition of a Mediclaim Policy and Health Insurance, intends to speak out.

What is a Mediclaim Policy?

A Mediclaim Policy is one that gives you specified financial protection at the time of medical emergency. It takes care of your expenses in case you are hospitalized for an accident, sudden illness or surgery, or any other planned surgery during the policy tenure. There are two ways in which your medical bills are settled- Cashless or Reimbursement. If you have purchased a Mediclaim policy, you can request reimbursement by submitting the bills to the insurance company. The reimbursement amount will be limited to the sum assured by the policy. 

Also, if you have opted for a cashless settlement option, you need not worry about paying the bills. You need not pay anything out of your pocket and the insurance company will directly settle the bills with the hospital. However, in certain cases, in order to obtain the benefit of the cashless settlement option, you must take the treatment only from the network hospitals of the insurance company. Some insurance companies do have terms and conditions, pertaining to which the treatment expenses will be reimbursed, so it is important to be informed. 

One of the critical features of a Mediclaim Policy is that it is valid for a limited period, and you must renew the policy at the end of the term to continue getting the benefits of the policy. 

Tax benefits of a Mediclaim Policy

Premiums paid on a Mediclaim policy are tax-deductible under Section 80D of the Income Tax, up to Rs. 25,000. If you are above 60 years of age, the deductions go up to Rs. 50,000. If you are over 60 and your policy includes a parent, you can claim up to Rs. 1 lakh from your taxable income.

Inclusions in a Mediclaim Policy

While the terms and conditions with respect to the inclusions in a Mediclaim Policy may differ for different insurance companies, but mostly the following expenses are covered in all types of Mediclaim Policy. 

  • Hospital charges
  • Day care treatment which does not require hospitalization
  • Pre and Post hospitalization charges
  • Hospital stay charges for bed, ward and ICU
  • Consultation fees/ OPD charges.

What is a Health Insurance Policy?

Health Insurance is an insurance cover that covers for your medical and surgical expenses in case of emergencies. Similar to a Mediclaim Policy, in a health insurance cover you either pay out of your pocket which are later reimbursed by your insurance company or the insurer directly settles your bills with the hospital. 

Health Insurance offers more comprehensive coverage and covers more than just your hospitalization expenses. To mention those, health insurance policies cover critical illness for a number of diseases like cancer, kidney failure, heart diseases etc. The policy-defined benefit will pay you a lump-sum amount upon the diagnosis of any of the specified critical illness without the need to produce any sort of hospital bills. The policy also covers expenses incurred on ambulance, maternity expenses, vaccination for animal bites etc. 
The best feature of a health insurance policy is that you don’t necessarily need to be hospitalized to make a claim and also there is no restriction to the number of claims you can make on your health insurance cover.

Tax benefits of a Health Insurance Policy

A health insurance policy gets the same benefit as Mediclaim Policy under Section 80D of the Income Tax. However, you should not see Mediclaim or health insurance as an investment just to avail of a tax benefit but a means to secure your financial interests in the face of expensive medical care.

Difference Between Health Insurance and Mediclaim

Mediclaim Policy

Health Insurance

It covers only for hospitalization expenses in case of an accident or surgery and any pre-decided diseases for a pre-specified amount.

It not only covers the hospitalization expenses but also you pre and post hospitalization charges, ambulance charges and also offers compensation in case of loss of income as a result of an accident.

No add-on coverages are offered except for those specified in the policy.

It offers a more comprehensive coverage in form of critical illness cover for over 30 diseases, maternity coverage, accidental disability coverage and personal accident coverage.

Sum assured in a Mediclaim Policy does not exceed Rs 5 lakhs.

Sum assured is extensive with a limit of up to Rs 6 crores.

To avail the benefits of Mediclaim Policy it is important for the insured to get hospitalized.

It is not necessary for the insured to get hospitalized and benefits of day-care procedure can also be availed.

There is a limit to file claims until the sum assured is totally exhausted.

In case of a critical illness cover, the assured sum is paid in lump-sum.  Such claims can be made only once during the policy tenure but otherwise there is no limit to the number of claims until the sum assured is exhausted. 

Looking at the above-mentioned differences, we see there is a thin line between a Mediclaim Policy and a Health Insurance Policy but it totally depends on an individual of the product you wish to choose. Other factors that might influence your decision here are the amount of premium you are willing to pay, the age factor, family history of diseases, the number of dependents for a family insurance cover, etc.

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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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