Nowadays, health issues can arise at any time, and the cost of medical treatment is increasing year by year. People seek insurance to protect themselves from unforeseen expenses. Regarding this, two terms that often appear are mediclaim and health insurance. To make an informed choice, it’s essential to understand what is health insurance and explore the health insurance plans that offer comprehensive coverage for your medical needs.
Both offer medical coverage, but their purposes, coverage scopes, and benefits differ significantly. It is necessary to understand the difference between them to select appropriate protection for yourself and your loved ones.
Keep reading for a detailed insight.
What is a Mediclaim?
Mediclaim is a form of health insurance that covers the cost of hospitalisation caused by illness or accidental injury. This typically covers room rent, intensive care unit (ICU) charges, doctor’s fees, and nursing expenses incurred during hospitalisation, subject to the sum insured.
In this type of plan, claims can be settled through reimbursement or cashless settlement at network hospitals. Being affordable, mediclaim enables you to handle sudden health emergencies.
What are the Benefits of Mediclaim?
Discussed below are the benefits of a mediclaim policy:
- Financial Protection During Hospitalisation
Mediclaim policies cover expenditure arising from hospitalisation due to illness or injury, including room rent, doctor’s fees, nursing charges, and surgery costs, thus making medical care relatively less burdensome.
- Cashless Hospitalisation Facility
The policyholder can avail of treatment at a network hospital without any upfront payment, as the insurer directly settles the bills through the cashless facility.
- Family Coverage
Mediclaim provides coverage for your entire family, including spouse, children, and dependent parents, under a single plan, offering protection for all loved ones.
- Pre and Post-Hospitalisation Expenses
Most mediclaim policies also provide coverage for medical expenses during a specified period before and after hospitalisation, thereby effectively managing total healthcare costs.
- Tax Benefits
The premiums paid for mediclaim policies are eligible for deductions under Section 80D of the Income Tax Act, 1961, thereby reducing tax liability and promoting financial security in the event of health emergencies.
What is Health Insurance?
Health insurance, also known as medical insurance, covers the insured’s medical and surgical expenses. It covers hospitalisation, surgeries, day-care treatments, pre- and post-hospitalisation expenses, and sometimes outpatient department (OPD), ambulance, and modern treatment expenses.
The insurer reimburses the policyholder or directly settles the hospital bills under the cashless hospitalisation plan, depending on the plan’s inclusions and exclusions.
What are the Benefits of Health Insurance?
The following are the benefits of a health insurance policy:
- Comprehensive Coverage
Health insurance provides comprehensive protection, covering hospitalisation, surgeries, day-care procedures, maternity benefits, outpatient care, and even critical illnesses.
- Preventive and Wellness Care
Most health insurance plans now cover vaccinations, annual check-ups, and other preventive healthcare benefits to encourage early detection and better health management.
- Critical Illness Protection
Major illnesses, like cancer, heart disease, or kidney failure, are often covered under health insurance and usually allow for a lump-sum payment to help you manage and recover from treatment.
- No Claim Bonus and Renewability
The policyholder receives a No Claim Bonus (NCB) for each year without making a claim, which increases the coverage amount or offers a discount on renewal. Additionally, the policy can be renewed throughout one’s lifetime, ensuring continuous health protection without interruption.
- Tax Benefits
Premiums paid for health insurance plans are deductible under Section 80D of the Income Tax Act, 1961. This helps you reduce your taxable income while securing health.
What is the Difference Between Mediclaim and Health Insurance?
The following table discusses the overall differences between mediclaim policies and health insurance plans:
| Aspect | Health Insurance | Mediclaim Insurance |
| Coverage Offered | Offers comprehensive coverage for hospitalisation, pre/post-hospitalisation, ambulance, and even loss of income due to an accident. | Covers only hospitalisation and accident-related treatment up to a pre-defined limit. |
| Pre & Post-Hospitalisation | Covers expenses before and after hospitalisation, including diagnosis and doctor consultations. | Covers only hospitalisation costs; pre/post-hospitalisation expenses are limited or excluded. |
| Ambulance Charges | Includes reimbursement for ambulance charges up to a specified limit. | Usually, it does not reimburse ambulance charges. |
| Maternity and Daycare Procedures | Covers maternity, newborn care, and day-care treatments that do not require hospitalisation. | Does not cover maternity or day-care procedures; hospitalisation is mandatory for claims. |
| Critical Illness Cover | Covers many fatal illnesses like cancer, heart attack, and stroke, with fixed benefit pay-outs. | Does not offer coverage for critical illnesses. |
| Add-on Covers | Allows add-ons such as personal accident, maternity, or critical illness cover for enhanced protection. | No add-on options are available. The coverage is fixed and limited. |
| Flexibility | Offers flexibility to tailor or upgrade coverage and get discounts for long-term policies. | Provides no flexibility. |
| Sum Insured | Coverage can range from ₹50,000 up to ₹6 crore per year. | Coverage is limited, usually up to ₹5 lakh per year. |
| Hospitalisation Requirement | Benefits like day-care or critical illness claims do not require hospitalisation. | Hospitalisation is mandatory to avail claim benefits. |
| Premium | Premium is higher due to wider coverage and additional benefits. | Premium is lower since coverage is limited to hospitalisation. |
| Monthly Pay-outs | Some plans offer monthly payouts for major illnesses to support ongoing treatment. | No monthly payout options are available. |
What are the Things to Look for When Choosing a Mediclaim Policy or Health Insurance?
The following are the things to look for when making a choice between a health insurance plan and a mediclaim policy:
- Sum Insured
Typically, the plan includes a predetermined sum insured that cannot be altered until renewal.
- Plan Basis
You can buy the plan either individually or as a family floater. A family floater plan usually covers the insured, their spouse, and dependent children and parents.
- Renewal Discounts
Health insurance often includes a No Claim Bonus (NCB) benefit at renewal after each claim-free year, which can help lower renewal premiums.
- Understand Exclusions
The premium for the plan is determined by several factors, including the sum insured, the insured’s age and gender, their geographic location, and the policy duration.
- Tax Exemption
The plan provides tax benefits on premiums paid under Section 80D of the Income Tax Act, 1961.
- Co-payment
Some plans may offer a co-payment option that lowers the insurance premium by a fixed percentage. If you choose co-payment, you will pay a fixed percentage of total medical expenses, while the insurance company covers the rest up to the sum insured limit.
- Insurance Company
Whether you are opting for a mediclaim policy or a health insurance plan, choose a reputed insurance provider. Also, check the company’s hospital network and its record of claim settlements before making a purchase.
For instance, Star Health Insurance has more than 14,000 network hospitals across the country and a 97% cashless final approval rate within 3 hours, ensuring quick and hassle-free claim settlements.
Mediclaim and health insurance both serve valuable purposes, but they play different roles. While mediclaim meets basic hospitalisation needs, health insurance provides all-around protection, covering hospitalisation, critical illnesses, and even preventive care.
Understanding the difference may help you make an informed decision and keep you and your family financially secure in the event of a medical emergency.
