Health Insurance vs Mediclaim – Which is Better?

Paying for healthcare expenses from your savings is a mistake that most Indians make. Experts worldwide recommend it is vital to have some form of insurance to get financial protection. But before you purchase any type of insurance, you must know the difference between health insurance and Mediclaim.

Knowing how each of these insurance policies work will help you decide to choose the right one based on your financial and health condition. Let us know more about health insurance and Mediclaim.

What is health insurance?

It is a type of insurance cover where, as a policyholder, you can claim compensation from the insurance company for the expenses you incur. Generally, the health insurance policies provide coverage against expenses relating to medical check-ups, room rent, hospitalistaion, medication, consultation, surgery, etc.

Depending on the type of health insurance policy you hold, the coverage for specific expenses can be part of the basic plan or the add-ons. The insurance company reimburses the amount you spend or settle the bills directly with the hospital.

Typically, a health insurance policy provides comprehensive coverage, and it has a large sum insured which can run into several lakhs or crores of Rupees. If you don’t make a claim in a policy year, the insurance companies offer a No-claim Bonus or NCB as reward, and you can increase the coverage by a specific percentage the following year upon policy renewal.

What is Mediclaim?

Mediclaim is a type of health care insurance that has a limited scope. Generally, Mediclaim offers compensation up to a specific sum assured for expenses such as domiciliary treatment, accidents, hospitalisation, specific illnesses, etc.

Unlike health insurance, in a Mediclaim policy, you get financial assistance up to a particular amount which is usually small. The insurance company pays the amount directly to the healthcare facility or reimburse the same upon verifying the expenses incurred based on the bills and receipts you submit.

Health Insurance vs Mediclaim

One of the critical factors you must consider while choosing the best healthcare plan for your family is the coverage offered. And, in terms of coverage, health insurance holds an advantage over Mediclaim as the former offers a more comprehensive protection.

Health insurance is an ideal choice for you if you want to purchase a policy to cover your full family, including parents, siblings, and children. On the other hand, if you are young and unmarried and lead a healthy lifestyle, you may not need a comprehensive cover. So, in this case, you can opt for a Mediclaim. It will help you get some sort of financial protection against healthcare expenses.

Apart from coverage, you must consider the policy premium. While the health insurance policy offers wider coverage, it comes with a higher cost. The premium increases as the coverage scope, sum insured amount, and the number of family covered increases. But, if you are on a tight budget, you can choose a Mediclaim policy as the policy is much affordable and the coverage you get is cost-effective.

One of the few things that are common between health insurance and Mediclaim is the tax benefits. The premium you pay for both are eligible for tax deduction up to Rs.25,000 under Section 80 D of the Indian Income Tax Act.

Final Word

Now that you know the difference between health insurance and Mediclaim, assess your insurance needs carefully and choose a suitable policy. Whatever policy you choose is the best for you.