A few days ago, one of our advisors at Ditto was asked a rather intriguing question – What is the difference between a Mediclaim policy and a standard health insurance policy?
This is a common query amongst many people. While both may seem similar on the surface, they are different products catering to different groups. And this was exactly what the customer was confused about, which prompted him to contact us.
So, what exactly is a Mediclaim policy, and how does it differ from health insurance? Let’s take a look at this in detail and determine what is best for you.
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What is a Mediclaim Policy? What Expenses Does it Cover?
A Mediclaim policy is a type of health insurance that solely covers the cost of hospitalisation and treatment due to illness or injury. Unlike standard health insurance plans, Mediclaim policies come with a lower coverage limit and only cover hospitalisation expenses. It also does not come with the perks and benefits that standard health insurance plans have.
This is because when it was first introduced in 1986, it was meant to address the increasing need for affordable healthcare coverage and mitigate the financial burden of hospitalisation costs for the common public.
Over the years, Mediclaim has evolved, and today, private and public sector insurance companies offer various Mediclaim products catering to different segments of society. This also laid the foundation for more comprehensive government health insurance policies that followed, including schemes like Ayushman Bharat and other public health programs.
While Mediclaim was a great initiative in 1986, when there was limited choice in health insurance, let’s take a look at how well it bodes today when several private health insurance plans are available at an affordable cost.
Difference Between a Mediclaim Policy and a Standard Health Insurance Plan
Although both Mediclaim and health insurance provide financial support during medical emergencies, there are significant differences between the two. Let’s take a look at a few of them now:
| Basis | Mediclaim Policy | Standard Health Insurance |
|---|---|---|
| Coverage | Limited to hospitalisations only | Comprehensive, includes outpatient care, maternity, and more |
| Sum Insured | Fixed, usually lower. | Higher coverage limits, customisable plans, and perks increase the cover amount (restoration and no-claim bonus). |
| Premium | Low | Higher premiums, depending on the plan. |
| Flexibility | Limited coverage and options. | Flexible coverage with various add-ons, increasing cover amounts, and more options. |
| Pre and Post Hospitalisation | Not covered | Extensive coverage, often up to 60 and 180 days respectively. |
Here is a more detailed article on the differences between a Mediclaim plan and a standard health insurance policy.
Advantages & Disadvantages of Purchasing a Mediclaim Policy
Now that we have understood the differences, here are some pros and cons of Mediclaim plans that will help you make an informed decision:
- Pros of Mediclaim Insurance Plans
- Affordable Premiums: Mediclaim policies often have lower premiums than comprehensive health insurance plans, making them an economical option for basic hospitalisation coverage.
- Cashless Hospitalisation: Many Mediclaim policies offer cashless treatments in network and PPN hospitals, reducing the need for upfront payments during medical emergencies.
- Tax Benefits: Premiums paid towards Mediclaim policies are eligible for tax deductions under Section 80D of the Income Tax Act.
- Financial Security: A Mediclaim policy acts as a safety net against sudden medical expenses, covering most hospitalisation and treatment costs. At the end of the day, having some insurance is better than having no insurance.
- Cons of Mediclaim Insurance Plans
- Coverage Limitations: Mediclaim policies have a set upper limit for coverage, which may not be enough for major illnesses or chronic ailments.
- Hospitalisation Required: Only hospitalisation-related expenses are covered. Medical check-ups, outpatient treatments, day-care procedures, etc., may not be included.
- No Flexibility: Mediclaim policies offer little flexibility in coverage. Unlike standard health insurance plans, they don’t offer add-ons like maternity, mental health, or critical illness coverage.
- Claim Rejections: Due to more strict conditions, there's a higher chance of claim rejections compared to standard health insurance plans. It’s important to check the claim settlement and incurred claim ratios before proceeding with any insurer.
- Can’t Keep Up With Inflation: Since Mediclaim plans do not have a restoration benefit or a no-claim bonus, they cannot keep up with the raising cost of medical treatments. A policy purchased keeping in mind today’s rates may not be sufficient for a medical procedure 5 years from now.
Types of Mediclaim Policies in India
You can choose from five types of Mediclaim plans based on your needs and preferences. Here’s a brief overview of them:
| Type of Mediclaim | Description |
|---|---|
| Individual Mediclaim | This policy covers only one person under a single policy. |
| Family Floater Mediclaim | This is a single policy that covers the entire family under a shared cover amount. |
| Senior Citizen Mediclaim | It is specially designed for individuals over 60, offering coverage for old-age-related illnesses. |
| Group Mediclaim | Employers offer these to their employees as part of a benefits package, often with no or low premiums. |
| Personal Accident Mediclaim | These Mediclaim policies cover you against personal accidents leading to death or disability. While this type of insurance is primarily preferred in term policies, it is also available as a Mediclaim plan. |
This brings us to an important juncture. Even if Mediclaim plans have different types that cater to different needs, should you purchase one?
Should You Purchase a Mediclaim Policy?
A Mediclaim policy is ideal if you’re seeking affordable, basic coverage for hospitalisation expenses. It offers protection against medical emergencies, especially if you’re looking for cost-effective healthcare coverage. However, if you require broader coverage that includes outpatient care, critical illness, or wellness benefits, a more comprehensive health insurance plan might be a better choice. Here are some of the top health insurance plans in 2024.
Top Health Insurance Plans in 2024
Before we take a look at the policies, let’s understand what we should look for in a good health insurance policy in 2024:
- No co-payment, room rent limits, and disease-wise sub-limits.
- A Low pre-existing disease waiting period (PED WP) and specific illness waiting period (SI WP).
- A good restoration bonus, pre- and post-hospitalisation cover, network hospital list, and no-claim bonus are also added advantages.
- Apart from these features in the policy, you should also consider some metrics that assess the insurer’s performance. These include the Incurred Claim Ratio (ICR) and the Claim Settlement Ratio (CSR).
| Top Health Insurance Pan | Waiting Periods | Other features | Insurer Metrics |
|---|---|---|---|
| HDFC ERGO Optima Secure | PED WP: 3 years SI WP: 2 years |
Pre & post hospitalisation cover: 60 & 180 days Restoration: 100% of base SI, once a year (add-on available for unlimited restoration) Loyalty Bonus: 50% pa, up to 100% |
Network Hospitals: 11.5k + CSR: 98% ICR: 85% |
| Care Supreme | PED WP: 3 years (add-ons can reduce it) SI WP: 2 years |
Pre & post hospitalisation cover: 60 & 180 days Restoration: Up to Base SI, unlimited times Loyalty Bonus: 50% pa, up to 100% (add-on can increase it to 100% pa, up to 500%) |
Network Hospitals: 16k+ CSR: 90% ICR: 58% |
| Aditya Birla Activ One Max | PED WP: 3 years (add-ons can reduce it) SI WP: 2 years |
Pre & post hospitalisation cover: 90 & 180 days Restoration: 100% of base SI, unlimited times Loyalty Bonus: 100% pa, up to 500% |
Network Hospitals: 11k+ CSR: 95% ICR: 61% |
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Conclusion
A Mediclaim policy is a health insurance policy with add-ons and other features, such as restoration and loyalty bonuses.
Both Mediclaim and a full-fledged health insurance plan can be valuable tools for protecting yourself against unexpected hospitalisation expenses. The primary difference is that Mediclaim offers basic coverage, while a health insurance plan offers more comprehensive coverage but also costs more.
Even if you’re looking for an affordable option, standard health insurance plans that do not burn a hole in your pocket are available. If you’re interested in finding out more, you can always book a call with our IRDAI-certified advisors at Ditto Insurance for an honest, spam-free experience.
