Mediclaim Or Health Insurance: Which Is Better?

ByAmrina Alshaikh

Mediclaim and Health Insurance policies are often referred to interchangeably. Commonly these two are considered as same, but each has different benefits. Suppose you are individual thinking of purchasing a health insurance plan in India and do not know where to begin. First, learn the difference between a Mediclaim and a Health Insurance policy to make an informed decision as to which suits your requirements best.

What Is A Mediclaim Policy?

Mediclaim is a type of health insurance policy that provides financial benefits during medical emergencies. It pays for all the medical expenses during hospitalisation, it covers:

  • Accidental medication
  • sudden illness or surgery
  • any surgery during the policy tenure

Mediclaims are of two types- Cashless and Reimbursement.

What is Health Insurance? 

Health insurance covers all medical and surgical expenses in case of emergencies. If you have a health insurance plan, you can pay either pay all expenses first and later get reimbursed by your insurance company, or the insurance company settles all bills directly with the hospital in your behalf.

Even though the two sound similar there are differences in functionality between Mediclaim and Health Insurance

MediclaimHealth InsuranceCovers all medical expenses during hospitalizationApart from hospitalisation expenses, it also includes annual health checkups, OPD expenses, and alternative treatments among others.No add on coversnumerous add-ons cover such as Critical Illness Cover, Maternity Benefit and Infertility Cover, etcThe maximum hospitalization expenses cover is Rs 5 lakhsNumerous health insurance covers based on age, city, number of members in a single plan, etc.It is not flexibleThese are flexible and can be customised

There Are Different Benefits of Mediclaim & Health Insurance

Benefits under A Mediclaim

  • provides immediate coverage for all medical expenses from the moment you are hospitalised
  • You can opt for cashless services at the hospital that is your insurance company directly pays all bills and expenses instead
  • You can opt for reimbursement, that is all hospitalisation expenses are directly paid by you, and the insurance company will later reimburse the same amount to you

Benefits Of A Health Insurance

  • Provides with comprehensive coverage
  • Provides the policyholder with numerous add-ons options
  • You can cover all family members collectively under a Family Floater Health Insurance plan
  • All expenses pre and post-hospitalization are covered
  • you can opt for a Critical Illness cover instead
  • You can opt for additional benefits like Outpatient benefit, Maternity Benefit, Restoration benefit, etc.
  • You can opt for a specific senior citizen health plan for your parents
  • You can also make cashless claims here too

Both Mediclaim and Health Insurance policies avail tax benefits under Section 80D of the Income Tax Act in India. Premiums paid for a Mediclaim policy are tax-deductible up to Rs. 25,000. The deduction goes up to Rs. 50,000 if you are over 60. +You can claim up to Rs. 1 lakh from your taxable income if you are over 60, and your policy includes a parent.

There are similar tax benefits under a health insurance policy too. However, you should invest a medical or health insurance plan not just as a way to avail tax benefits but to protect your financial interests in the face of growing medical costs and when faced with a sudden or critical medical illness.

Features of Mediclaim Insurance Plan in India 

A Mediclaim insurance plan in India provides insurance coverage against hospitalisation. Expenses and treatment expenses on account of an accident or any specified diseases. The sum assured is generally pre-decided. Accordingly, the premium amount is decided and also based on the proposer’s age, gender, geographical location, and duration of the preferred policy plan. The Claim Settlement is processed in the form of reimbursement as well as cashless treatment. The plan can be purchased by an individual as well as a family floater plan to cover self, spouse, dependent children, and dependent parents. The plan offers tax benefit as per Section 80D of the IT Act 1961, as mentioned above.

Features of A Health Insurance Plan In India

Health insurance plans offer comprehensive insurance coverage, including critical

illness cover for up to 30 plus illnesses. However, a critical illness isn’t a part of a basic health plan; it can be opted for as rider under additional cover. It provides the same benefits as a Critical Illness Insurance plan. Generally, health insurance plans offer benefits upon renewal after the end of a claim-free year. This benefit is known as the No Claim Bonus. Few health insurance policies come with an option of co-payment, which helps to decrease the insurance premium. The premium decreases as a particular percentage of the treatment expense are decidedly paid by the policyholder while the remaining balance is paid by the insurance company. It also offers tax benefits under section 80 D of the income tax act.

Unable To Decide Which One To Buy?

When purchasing any insurance policy, it is best to make an informed decision. Here are a few things to consider before buying a health insurance plan or Mediclaim:

  • Your financial condition
  • Any pre-existing health issues in your family
  • Whether you are looking for a long term or short term plan
  • Are you looking for flexibility in your health plan
  • Do you would need add-on covers and benefits
  • Are you willing to pay a high or low premium amount
  • You and your family members age, lifestyle, medical conditions, etc

You can choose either of the two according to what best suits your needs and requirements. You can check out the various policy options, offers, and benefits by visiting direct company sites or a trusted agency’s website for a holistic understanding before purchasing a policy.