Understanding the Difference Between Mediclaim and Health Insurance

Insurance terms like “mediclaim” and “health insurance” may seem similar, but they offer different levels of coverage. Knowing their differences can help you choose the best plan for your healthcare needs.

What is Mediclaim?

Mediclaim is a basic health insurance policy that covers hospitalization expenses due to illness or accidents. It provides either a cashless facility at network hospitals or reimbursement of actual medical costs up to the insured amount.

Key Features:

Hospitalization Coverage: Covers hospital stays, surgeries, doctor’s fees, and treatment costs

Fixed Sum Insured: Coverage is capped, usually up to ₹5 lakh, and can only be changed upon renewal.

Claim Process: Offers cashless treatment at network hospitals or reimbursement for non-network hospitals.

Limited Coverage: Doesn’t cover outpatient visits, regular check-ups, or critical illness treatments.

For instance, if you undergo surgery costing ₹2 lakh and your mediclaim policy covers up to ₹3 lakh, the insurer will reimburse the full ₹2 lakh.

What is Health Insurance?

Health insurance provides broader and more comprehensive coverage compared to a mediclaim policy. While mediclaim mainly focuses on hospitalization expenses, health insurance covers a wide range of medical costs.

Key Features :

Covers More Than Just Hospitalization
Health insurance covers more than just hospital stays, including pre- and post-hospitalization medical services, ambulance fees, daycare procedures like minor surgeries, and sometimes outpatient consultations.

Preventive Care Benefits
Many policies cover regular check-ups, screenings, and wellness programs.

Coverage for Critical Illnesses
Certain health insurance plans provide lump-sum payouts for serious illnesses such as cancer, heart disease, or kidney failure. 

Flexible Sum Insured Options
Unlike mediclaim, health insurance allows sum insured adjustments over time.

For example, If diagnosed with a critical illness, a health insurance policy may provide a lump sum payout, which can be used for treatments, recovery costs, or other expenses.

This flexibility and comprehensive coverage make health insurance a more suitable option for long-term financial security and healthcare management.

Mediclaim vs. Health Insurance: A Quick Comparison.

Aspect	Mediclaim	Health Insurance
Coverage Scope	Limited to hospitalization expenses.	Comprehensive, including hospitalization, pre- and post-hospitalization, and sometimes outpatient care.
Critical Illness	Generally not covered.	Often includes coverage for critical illnesses with lump-sum payouts.
Preventive Care	Not typically included.	Many plans offer preventive health check-ups and wellness benefits.
Flexibility	Fixed sum insured with limited customization.	Flexible sum insured with options to enhance coverage and add riders.
Premiums	Generally lower due to limited coverage.	Higher, reflecting the broader range of benefits.

Tax Benefits.

Investing in health coverage not only protects your well-being but also offers tax benefits under Section 80D of the Income Tax Act, 1961.

Deduction Limits:

For Self, Spouse, and Dependent Children:

Up to ₹25,000 (if below 60 years)

Up to ₹50,000 (if 60+ years)

For Parents:

Additional ₹25,000 (if below 60 years)

₹50,000 (if parents are senior citizens)

If you and your family are under 60 and your parents are above 60, you can claim a total deduction of ₹75,000.

Preventive Health Check-up Deduction:

An additional ₹5,000 deduction is available for preventive check-up expenses (included within the above limits).

Mode of Payment:

Premiums must be paid via non-cash modes (cheque, bank transfer, or card payments).

Preventive health check-ups can be paid for in cash.

Note: These deductions are applicable only under the old tax regime. If you opt for the new tax regime, you will not be eligible for tax benefits under Section 80D.

What Should You Choose: A Mediclaim Policy or a Health Insurance Plan in India?

Both mediclaim and health insurance provide tax benefits, but experts recommend health insurance due to its broader coverage.

There is no single “best” insurance company or mediclaim plan for everyone. Healthcare needs vary from person to person, and what works well for one individual may not be ideal for another. 

Instead of looking for the “best” option, compare different health insurance plans based on their coverage, benefits, claim process, claim settlement ratio, and premium costs. Choose a policy that aligns with your healthcare needs and financial situation.

At Lxme, we understand that women often prioritize their family’s financial and health security but overlook their own. That’s why we encourage you to take charge of your well-being. Whether you’re choosing between mediclaim or health insurance, it’s essential to make an informed decision that safeguards both your health and finances. Lxme simplifies finance for women, helping you compare and choose the right insurance plan that aligns with your unique needs. Your health is your biggest asset- protect it wisely!

You can check out the Lxme app which offers expert-curated investment schemes for women.

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Further read:

• 10 Top Benefits of Health Insurance

• How to Apply for Pradhan Mantri Matru Vandana Yojana Online and Offline

• Top 6 Investment Options for Senior Citizens