Difference Between Mediclaim & Health Insurance
- Author :
- TATA AIG Team
- Published on :
When it comes to health, you take several steps like maintaining a proper diet, exercising regularly, getting enough sleep and reducing stress. You also probably know that expenses on treatment, medicine and recovery in major or minor illnesses could be quite high despite healthy lifestyle habits.
The COVID-19 pandemic has strongly underlined the need for adequate insurance - both life and health insurance. In addition, the post-COVID complications could cause major illnesses which require extended hospitalization and rehabilitation resulting in more expenses.
Many have taken steps to buy health insurance after seeing the financial distress families have gone through during the pandemic in meeting medical treatment expenses.
What is Health Insurance?
However, when looking for health coverage, you come across two common types - health insurance and mediclaim. Do both these plans offer the same coverage? Are there any differences between the two? Let us find out!
A health insurance policy provides coverage for medical and surgical treatment of illnesses. Under the health insurance policy, when you undergo treatment for an illness, the insurer will take care of the payment of bills subject to the following conditions:
- The illness is covered under the policy.
- The treatment procedures for which the claim is lodged are permissible under the policy. Some policies exclude certain procedures.
- The insurance company approves the hospital and treatment setting.
- The claim is properly submitted with appropriate and complete supporting documentation.
- The insurance company may then pay the hospital or the service provider directly for the bills raised or reimburse you for the payment you have made. A health insurance policy is available on an annual basis and should be renewed every year. In addition, it is possible to buy a health insurance policy online these days.
What is Mediclaim?
A mediclaim policy allows for the reimbursement of hospitalization expenses during an accident, emergency surgery or any planned surgery during the policy term and is covered under the policy. Thus, it covers only the hospitalization costs. Mediclaim policies also offer cashless or reimbursement methods for claim settlement.
What is NOT COVERED in Mediclaim?
A mediclaim policy will cover only hospitalization costs, and therefore any other items of expenditure related to medical treatment such as diagnostic tests, rehabilitation treatment, general check-ups etc., are not covered under mediclaim.
What are the Differences Between Mediclaim vs Health Insurance?
On the surface, both mediclaim and health insurance policies might seem similar in providing financial support for medical expenses. However, there are a few important points of difference, and these are given in the table below.
|It covers only hospitalization expenses.||This is a more comprehensive insurance policy as it covers expenses in the pre and post-hospitalization period along with the treatment expenses.|
|It does not offer add-on coverage.||Add-ons increase the coverage available under the policy. Some important add-ons are critical illness cover, personal accident cover, accidental disability, loss of income, daily [hospital cash](https://www.tataaig.com/knowledge-center/health-insurance/hospital-cash-insurance) facility etc.|
|The features of a mediclaim policy are fixed according to the insurance provider, and no customization is possible.||More flexibility is available to the policyholder to choose the kind of coverage required. As the premiums are determined according to the features chosen, policyholders can customize the coverage under the policy according to their requirements.|
|The cost of a mediclaim policy does not change over the years.||The cost of a health insurance policy can change as the policyholders can get discounts for no claims lodged or on policies of longer duration, such as two- or three-year policies.|
|Another fixed aspect is the maximum coverage available which is ₹5 lakhs.||Health insurance coverage does not have an upper limit and depends on the policyholder's age, assessment of health status and the capacity to pay the determined premium. It can even be as high as ₹2 crores.|
|Mediclaim policies can be taken on behalf of another person, such as an employer for their employees.||In health insurance policies, besides individual personal health insurance policies, there can be [health insurance for parents](https://www.tataaig.com/health-insurance/parents-health-insurance) and dependent members.|
|Floater coverage under the mediclaim policy may or may not be allowed, according to the insurer.||All insurers allow [family floater health insurance](https://www.tataaig.com/health-insurance/family-health-insurance) policies that can cover self and family members in a single policy and thus provide coverage at a more affordable cost.|
The answer to which is better between mediclaim and health insurance depends entirely on the need of the policyholder and the specific circumstances in which either can be useful.
For example, suppose you are a reasonably healthy young person who wants coverage for an unexpected hospitalization due to, say, an accident-prone profession; in that case, you can choose to have a mediclaim policy. In addition, many companies offer mediclaim coverage as an important prerequisite to the salary offered to their employees.
On the other hand, if you have a family history of predisposition to certain illnesses or you feel that your lifestyle could lead to critical illnesses in the future that would strain you financially, then a health insurance policy is the ideal solution.
Further, the coverage under a mediclaim policy is limited, whereas the health insurance sum assured can be chosen by the policyholder depending on their needs. Mediclaim is cheaper, whereas health insurance premiums need to be optimized according to the coverage and add-ons you require, for more information, check our health insurance premium calculator.
Even then, a family health insurance policy is cheaper than standalone policies for individual members. In addition, health insurance policies have started covering AYUSH treatment in recent times while it is still not available under mediclaim policies.
What are the Factors to Consider Before Buying Health Insurance?
The main factors related to buying health insurance are:
- Your age, health status, family medical history, number of dependents and their health status.
- A reasonable estimate of coverage is required depending on expected future costs adjusted for inflation.
- The dependability of the insurance provider. For instance, TATA AIG's tie-up with over 7200 hospitals across India assures you of our complete support, no matter where you are.
- Ease of application process for purchasing the policy as well as claim settlement. You can buy a Tata AIG health insurance policy from our website in simple steps. You can even get round-the-clock online and telephone support at every stage.
- Claim settlement ratio of the insurer; at Tata AIG, we have a claim settlement ratio of 98% for FY 2020-21.
Mediclaim and health insurance are two types of policies that help during medical emergencies. While the former is restricted to hospitalization expenses, the latter is more comprehensive and beneficial for the entire family. Further, the add-ons that can be included in health insurance policies can enhance their usefulness to help overcome financial difficulties during a, particularly traumatic period.
Disclaimer / TnC
Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.