Difference between Mediclaim and Health insurance

Introduction

If you have been around round table talks with the elders in your family (parents and grandparents), MEDICLAIM is a term that has hit your ears too often. Maybe your grandparents suggested your parents to get one and talked about how crucial such insurances are, calling them a “life-saver”.

Now, when you were little, you thought nothing much of it. However, as you grew up and came of age to make those financial decisions, now you are in 2 minds -

1. Is health insurance and mediclaim insurance the same?
2. If health insurance and mediclaim insurance are different, which one is better?

Well, let’s get one doubt out of your mind ASAP - Mediclaim insurances are NOT THE SAME as health insurance plans.

However, to know which of these two suits you best, you need to compare Mediclaim Insurance vs Health Insurance thoroughly. Here’s a quick comparison

Across this blog, we will clear the air about 2 of the most common terms - Mediclaim and Health Insurance which are used synonymously, and have a worldwide pool of policyholders. We will be explaining how these two are different and which of these two has a better market hold and why.

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MEDICLAIM INSURANCE

It was 1986. The Indian government launched Mediclaim with a minimum coverage of INR 15,000 and a maximum coverage of INR 5 Lakhs. Considering the pricing across the health sector during those contemporary times, the coverage was adequate. The aim was to provide financial backup during an individual’s times of medical emergency.

A. What is Mediclaim Insurance?

Mediclaim insurance is a type of health insurance that is pocket-friendly in terms of its premium and offers financial support during hospitalisation. With Mediclaim, policyholders have a shot at both cashless and reimbursement modes of payment during circumstances like -

1. Accidents
2. Surgeries
3. Sudden ailments, etc.

B. What are the advantages of Mediclaim Insurance?

Mediclaim insurance has been around in the financial industry for a long time now. Obviously, several people, now in their senior years have held policies in Mediclaim considering how at one point in time Mediclaim was the viable financial option to fund medical treatments. However, there are a multitude of perks for Mediclaim as well -

1. Affordable premiums: With mediclaims, since the mediclaim insurance providers usually offer low coverage, the premiums are substantially low. This makes it a pocket-friendly financial coverage that specifically caters to those with a financial crunch.
2. Convenient claim settlement procedure: In the case of mediclaim policyholders, the claim settlement process is particularly hassle-free. Claims can be settled either way - reimbursement and cashless.
3. Family covered offered: Mediclaim insurance plans are offered for both - Individuals and Families. The number of policyholders that can be hosted by a mediclaim insurer in the case of family plans, varies from one insurer to another.
4. Tax benefits available: Mediclaim policyholders can also reap tax benefits under Section 80D.

C. What are the disadvantages of Mediclaim Insurance?

Well, let’s just say, there is a reason why one of the older financial pat-on-the-back in terms of medical emergency funds, has its policyholders looking for alternatives. Take a look at why -

1. Nominal coverage: The coverage, while fetching a nominal premium, is also pretty low. Considering the current medical inflation, expensive hospitalisation invoices, and more, a maxed-out coverage of INR 5 lakhs, without any restoration feature is in no way, ideal. In fact, it defeats the entire purpose of availing insurance coverage because policyholders end up paying a majority of the bill.
2. Lack of No-Claim Bonus: Mediclaim providers are reluctant to offer any No-Claim Bonus in case the policyholder doesn’t raise a claim across a year. This means individuals are missing out on the perk that is offered when policyholders stay healthy by boosting the coverage offered with no spike in premiums.
3. Only hospitalisation coverage: Mediclaim is only in play when it comes to policyholders being in the hospital. It doesn’t cover pre and post-hospitalisation expenses and that comes out of the pocket of the policyholder. This makes the plan a non-comprehensive one.
4. No Insurance Add-ons: Mediclaims are not flexible in their build. No customisation can be done over any add-ons to cater to a policyholder's specific medical requirements.

Mediclaim brings with it a plethora of cons that have been making potential policyholders seek financial alternatives that would optimally support them during times of medical mayhem whilst not eating away at their savings. This brings us to the best health insurance policies from top-notch insurers.

HEALTH INSURANCE

Health insurance plans were launched to provide individuals with better financial security in case of medical emergencies.

A. What is Health Insurance?

Health insurance plans are financial coverage offered to policyholders to fund medical expenses, surgeries, accidents, high-end treatments, daycare procedures, pre and post-hospitalisation expenses, and more via cashless or reimbursement mode of payment.

B. What are the advantages of Health Insurance?

The health insurance industry prides itself on its numerous policyholders and increased policyholders following the current population’s increased health awareness and financial apprehension. The growing popularity and demand to avail of health insurance plans can be attributed to a variety of perks -

1. The wide bandwidth of coverage: The best health insurance plans across the country offer potential policyholders a range of coverage extending from INR 3 lakhs to INR 1 crore. Such high coverage options ensure that policyholders have adequate funding to gain access to quality healthcare services. In current times, considering the rising medical charges, vulnerability to multiple pre-existing ailments, high-end modern treatments, and more, such substantial coverage guarantees that policyholders don’t have to dip into their savings when they face medical emergencies.
2. No Claim Bonus: Plans from the best health insurance providers come with a lucrative perk as a financial pat-on-the-back for policyholders who stay healthy across a year and do not raise any claims. Such perks boost the coverage bandwidth at no additional premium charges thus being a huge advantage for policyholders.
3. Flexible plans: Health insurance policies are a popular insurance tool across the market specifically for its customisable quality. Among its flexibility features are -

• Restoration
• No-claim Bonus Shield
• Inflation Shield
• Consumable coverage
• Maternity & newborn coverage
• International coverage and Enhanced global coverage
• Unlimited restoration
• Copayment Waiver
• Hospital Cash

The aforementioned pointers are considered health insurance add-ons (although some of these might be an in-built feature in plans; remember to approach and enquire your health insurer and health insurance advisor about the same) and are instrumental in being a customised product targeting the specific medical and financial requirements of policyholders.

1. Critical Illness coverage: Critical illness coverage in health insurance is a relatively new feature that is being offered by some of the top health insurers. An estimated 31 critical ailments are covered by such plans and considering the coverage that is provided, funding for the high-end medical treatments to cure critical ailments becomes easily doable.
2. Tax Benefits: Health insurance policyholders can enjoy tax benefits under Section 80D.

C. What are the disadvantages of Health Insurance?

Just like any other financial tool, health insurance plans too do not come without some undertones. The cons of health insurance plans are as follows -

1. Expensive premiums: Health treatments and procedures do not come cheap these days, especially considering the modern and cutting-edge technologies that are being put into play to boost the chances of minimal side effects and complete recovery. Subsequently, health insurance premiums are pretty hefty.

SOLUTION: Health insurance premium EMIs are a feasible option for all health insurers these days. Thus, paying off the premiums becomes a convenient process.

2. Chances of mandatory copayment clauses: Health insurance underwriting determines the payout risk that a potential policyholder poses and thereby requests that he/she pays a mandatory copayment to mitigate the financial risks on the provider.

SOLUTION: Reputed health insurers provide plans that come without a copayment mandate. All that you need to do is compare various health insurance plans and opt for a policy that best suits your medical and financial conditions.

3. Extensive waiting period: In health insurance, waiting periods come for 3-4 different conditions -

• The commencement period of 30 days
• Pre-Existing Specific ailments of a maximum of 2 years
• Pre-Existing Critical illnesses of 2-4 years
• Maternity coverage of 3 - 4 years

SOLUTION: You can opt for various health insurance add-ons that help with waiting period reduction or waiver. You can also compare various health insurance policies and settle upon the one that offers the least waiting period

1. Permanent exclusions: Some health conditions are kept under the permanent exclusion list in the policy wording of health insurance plans. Such conditions might be ailments that fetch too high a charge when requiring treatment, or pre-existing conditions like cancer (even during remission since there are chances of a comeback).
2. Loading charges: Health insurance providers often take a look at the various payout risks posed by a policyholder, and spike the premium to cut their risk by adding loading charges to the premium. Such charges are added in case of multiple cases - pre-existing conditions, high BMI, genetic predisposition to certain ailments, etc.

SOLUTION: There are certain health insurance providers (like CARE) who do not bank on loading charges on premiums for health insurance policies. Thus, it’s best to go through insurers and plans and seek the ones that do not fetch loading charges.

Considering that now you have a pretty good idea about the true reflection of details on mediclaim and health insurance, now it’s time we take a look at the thorough comparison in mediclaim insurance vs health insurance plans -

What is the Difference Between Mediclaim Insurance & Health Insurance?

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Conclusion

When it comes to the medical world, the phrase “old is gold” doesn’t stick. This concept applies to mediclaim as well. If you are looking just to cover your hospitalisation expenses, even then, availing of mediclaim health insurance means you will be losing out on a plethora of lucrative perks that will come in handy. If it's about a financial crunch, health insurance providers, under the IRDAI regulations now offer EMIs to help you out. That makes health insurance policies an absolute preference over mediclaim insurance.

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