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Mediclain Vs Health Cover

This article is on the basic difference between mediclaim and health cover



MAX New York life recently launched ‘lifeline series’ — health cover plans for individuals. While typically it is the general insurance companies, which have been active in the mediclaim space, thanks to IRDA, now there are alternatives from life insurers such as ICICI Prulife and Bajaj Allianz.



Protection and savings

Mediclaim is usually a cashless policy, in which you can undergo treatment at any of the hospitals listed with the insurer without paying cash at the time of treatment. On submitting hospital bills, the designated third party administrators (TPAs) pay off the dues directly to the hospital.

Newly-launched health products of life insurers extend the same cashless facility. But the structuring is different. The latter, for instance, have a health cover along with the savings option. In other words, the premium you pay for health cover also has an investment element to it.



The idea is to meet the growing health requirement at an older age. Premiums on health policies increase with age. At that point, savings come into play to meet their medical requirements. This could be particularly helpful for retired people as health expenses will not eat into their retirement corpus.



Life of the policy

The general insurance covers would be valid for a year requiring renewals each year.

The policies issued by life insurance companies do not require renewals till the term expires. Health policies are of a longer tenure starting up to 20 years.



In case of mediclaim, the right to decline the policy renewal is in the hands of the insurer.

In case of health insurance, the insurer is obligated to offer the cover till the policy expires.



Coverage

Mediclaim insurance gives you a wider coverage. But mediclaim usually includes not so-critical diseases such as accidental insurance coverage and expenses incurred on cataract operation.

Under health products, you have general hospitalization products or specific disease management products.



Payouts

Most life insurance companies define benefit plans. It means you know the amount you will get from the insurer for a particular treatment in advance, irrespective of the actual expenses. Let us assume you have to undergo a bypass surgery costing Rs 1.5 lakh. Under the defined plan, you may be eligible to get Rs 2 lakh. Then the insurer will pay Rs 1.5 lakh to the hospital, like a cashless product and the balance will be paid off to you. Whereas in case of mediclaim, it acts as a reimbursement plan. You have to file a claim with the TPA, who will settle the dues with the hospital directly.



Policy closure

The key difference between mediclaim and health cover is that, once you stake a claim under the latter, the entire amount under the policy is paid out and the policy closed.

Under mediclaim, you can claim reimbursement till the time there is an assurance of the balance sum.



Health product?

Health cover can act as an additional cover to your mediclaim as it cannot provide with a complete protection

One of the main reasons in these health products is the claim amount is related to sum insured. It’s not an independent policy. In case of mediclaim, you will get back whatever you spend. For example, if a middle class consumer takes lesser sum insured, the health product will not suffice his needs.



These health covers definitely plug the gaps of the mediclaim. The defined benefit plan could be a handicap for an individual who has signed up for a less sum assured. But it could be a plus for an individual, who has signed up for an adequate sum assured. Often with a mediclaim, you may end up getting a part payment of claims for some reason. The TPA may take some time to pay off the balance. At such times, a good health cover can come to your rescue. In fact, you will know how much you will earn from your cover in advance. Similarly, your mediclaim could have caps and limits, which can be well augmented by the health cover. But that doesn’t imply that a standalone health cover can substitute a mediclaim in your kitty, he adds.



Medicailm


  • Offered by General Insurers

  • No Investment option

  • Renewals every year

  • Wider cover like accidental cover

  • Cashless

  • Reimbursement plans

Health Insurance



  • Offered by Life insurers

  • Bundled Investment option

  • Long term product

  • Offers hospitalization and disease management products

  • Cashless

  • Mostly defined benefit plans

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