Mediclaim Vs. Health Insurance: Which One Is Best?

Mediclaim Vs. Health Insurance
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Insuring yourself and your family against any medical attention requirements in the future is becoming a priority in today’s day and age. The best health insurance companies curate different products for varied customer medical needs. Two such products are a mediclaim policy and a medical or health insurance policy. Both these products have the same function of covering medical expenses, but the scope and range of the cover change. Mediclaim policy coverage is limited, while health insurance policies have a broader spectrum of coverage. To decide which is better for your requirements, you need to know what each policy offers and its differences.

What is Mediclaim Policy?

A mediclaim policy is an insurance plan that covers hospitalization and treatment costs for certain illnesses specified in the policy. The expenses covered are up to the sum insured, and anything above that has to be borne by you. If you have less money and need a health plan, you can opt for a mediclaim policy instead of a health or medical insurance policy. Moreover, as per the IT Act, you can claim tax benefits on the premium amount under section 80D. When you are less than 60 years of age, you can claim up to INR 25000 and INR 50000 if you are above that age.

Settlement of mediclaim policy happens in two ways, and they are:

1) Cashless Claim Settlement: In the event of hospitalization, you will have to fill up a claim application form with the network hospital’s insurance claim settlement department, get it stamped by them, and submit it to the insurance company. Alternatively, you can even do this with the insurance company online nowadays. Once you have intimated the company about your hospitalization, all the medical expenses incurred during this time will be paid for by the insurance company directly. Therefore, you don’t have to pay any costs from your pocket when you buy this type of mediclaim health insurance plan.

2) Reimbursement Claim Settlement: If your mediclaim policy has a reimbursement claim settlement procedure, you will have to pay for all the bills first, and then the insurance company will reimburse you all the expenses up to the sum insured amount. In addition, you will have to inform the company about your hospitalization at the time of hospitalization, which can happen online now. You must ensure that you maintain all the payment receipts, pharmacy bills, admission cards, discharge slips, and any other relevant documents or invoices because you will have to submit them to the insurance company to claim the reimbursement.

What is Health Insurance Policy?

A health insurance policy will cover all your expenses in a medical emergency, like an accident or a critical illness. It covers not just the hospitalization costs but even pre and post-hospitalization treatment expenses. This type of health insurance plan in India even covers home and OPD treatments. Tax deduction claims are possible on the premium you pay for a health insurance policy under section 80D of the IT Act.

Features Of Health Insurance Policy:

There are some essential features that a health insurance policy provides, and you should be aware of them:

  • A health insurance policy will pay for medical consultations with doctors without hospitalization.
  • Ambulance charge coverage is available in such policies.
  • Critical illness coverage under such plans will pay for expenses and treatment of diseases like cancer, heart ailments, paralysis, and many more.
  • Any treatment before and after you get hospitalized are taken care of by the best health insurance companies.
  • You can even cover your entire family with a single medical insurance policy.
  • Health insurance plans can cover maternity expenses and pay your hospital room rent.
  • Some plans also help you pay for dental treatment procedures and surgery.
  • Another helpful feature is the no-claim bonus, through which you pay a lesser premium in the year following the previous year, where you did not claim any medical benefits.

Differences Between Mediclaim and Health Insurance Policy:

1) Difference in Premium Amount:

Health insurance premiums are higher in comparison to mediclaim policies. Moreover, medical claim policies have a limited scope of coverage, due to which it does not cost much; hence the premiums are lower. In contrast, when you buy an online health insurance policy, you pay larger premiums because it provides a broader range of benefits.

2) Sum Insured Value Differs:

A mediclaim policy sum insured value does not exceed a maximum of INR 5 lakh as it just takes care of hospitalization expenses and a few fixed illnesses. However, unlike mediclaim, a health insurance policy is much more comprehensive in its coverage and provides many customizable features.

3) Pre & Post Hospitalization Treatment Costs:

If you buy a health insurance policy, it comes with a feature to cover even the pre and post-hospitalization costs which are not available in a mediclaim policy as it only pays for hospitalization treatment costs.

4) Difference in the Number of Claims:

It is possible to make as many claims as required by you until the sum insured amount gets over for both health insurance and mediclaim policies. However, the only difference is if you buy a health insurance online policy, which pays one lump sum amount for a year or its tenure if it has a critical illness plan add-on.

5) Flexibility of Add-Ons:

A Mediclaim policy does not provide any flexibility to change or have add-on plans, unlike a health insurance policy which is flexible, and you can always take an add-on plan in between.

6) Critical Illness Cover Option:

Covering critical illnesses with your insurance policy is only possible in a health insurance plan, not a mediclaim policy.


The decision to buy a mediclaim or health insurance policy is entirely up to you because only you know your financial position and medical requirements. Try to understand the benefits of both and how they differ. Always choose from the best health insurance companies in the market as they provide both policies. The primary thing that will help you to zero in on a correct decision will depend entirely on your needs.

Read more: Choosing and Arranging Health Insurance for Employees

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