What is the difference between health insurance and medical insurance?
If you are among one of those people who consider health insurance and medical insurance as one, then hold on. You are wrong. These terms may be used interchangeably but there’s a slight difference between the two of them. People often confuse health insurance with medical insurance and vice-versa. Here, in this article, we have differentiated between the said terms in a very easy manner so that you may never get confused between the two again.
What is Health Insurance?
Health insurance not only covers all the hospitalization expenses but also covers all the expenses such as pre-hospitalization and post-hospitalization which includes ambulance costs and related expenses. One can say that it is a comprehensive insurance policy.
Benefits of a health insurance policy:
- It is a well-known fact that every health insurance policy has a set of hospitals under it. This means if a person gets admitted in any of these hospitals which are covered by his health insurance plan, then he doesn’t have to pay for any of the expenses. Simply the policy number of the admitted person will work towards a cashless treatment at the hospital.
- A comprehensive health insurance policy also covers pre-hospitalization as well as post-hospitalization expenses (ranging from a period of 30 days - 60 days) depending on the type of insurance policy that you have purchased. This means that you don’t have to bear any of the transportation charges.
- If in case you do not claim your health insurance for a year, then you’ll be provided either with an increment or a with a discount in the sum assured. In addition to this, many health insurance companies provide their customers with a free medical check-up.
- In India, If you come under tax slab, then purchasing a premium health insurance policy will get you a tax refund under the Income Tax Act of India. A tax relation of Rs. 25,000 for the age group 18-50 years and Rs. 30,000 for the senior citizens will be provided under section 80D of the Income Tax Act, provided you are a citizen of the Republic of India.
- A comprehensive health insurance policy also offers you with a co-payment option. This means that in case of any treatment, the insurance company will bear some of the expenses while the remaining expenses will be paid by the person insured.
Different Types of Health Insurance Policies Available in India:
There are different kinds of health insurance policies that are available in India. These policies cover all the expenses in any kind of medical emergency. They are as follows:
1- Individual Health Insurance Policy: Individual health insurance policy provides coverage to the person insured against different kinds of ailments. It also covers the other benefits as mentioned above.
2- Family Floater Health Insurance Policy: The entire family is insured under this insurance policy. The family floater plan offers the individual members of a family with a fixed amount of health insurance. This type of plain can either be availed either for the treatment of an individual or a sum total for the treatment of an individual member of the family.
3- Pre-existing Disease Cover Policy- Under this plan, the policyholder will get a cover for all those diseases he had before purchasing the health insurance plan.
4- Surgical and Critical Illness Plan: This plan provides coverage against critical diseases such as cancer, heart attack etc.
5- Senior Citizen Health Insurance Policy: All the health-related issues in old age are covered under this policy.
6- Preventative Healthcare Policy: This policy covers the medical check-ups and related expenses such as consultation fee, concessions in tests fee, etc.
What is Medical Insurance?
The medical insurance offers limited coverage to hospitalization expenses and treatment towards the pre-specified ailments and accidents. Medical insurance doesn’t offer any add-on coverage like health insurance. It is based on the sum assured and it can’t exceed INR 5 Lakhs.
There are two claims under the medical insurance policy:
In the cashless claim, the insured is treated at the hospital which is covered by the insurance company. The insurance company will bear all the hospitalization expenses and the person insured will not have to pay any amount.
In Reimbursement claim, the insured must inform the insurance company about the hospitalization either in advance or at the time of getting admitted. In addition to this, all the original documents must be kept safe such bills, discharge card, etc. These will be required at the time of reimbursement claim.
Different Types of Medical Insurance Policies Available in India:
1- 1- Individual Medical Insurance Policy: Individual health insurance policy provides coverage of a specified amount to the person insured.
2- Family Floater Medical Insurance Policy: Under this policy, if the insured person in a family reaches a certain age or dies, then the policy for that person will be closed and the family members will not be allowed to renew the policy.
3- Pre-existing Disease Cover Policy- Under this plan, the policyholder will get a cover for all those diseases he had before purchasing the health insurance plan. It also gives coverage to all those diseases which may arise from the pre-existing disease.
4- Renewability Age: All the policies provide coverage for a year only. Therefore, the policy must be purchased at an early age to get better coverage at a low premium and other additional benefits.
Difference between Health Insurance and Medical Insurance:
Before purchasing health insurance or medical insurance plans, analyze the thin line between the two.
1- Medical insurance will provide you coverage only for hospitalization, pre-specified ailments and accidents that too for a pre-specified amount while health insurance will provide you with comprehensive coverage against hospitalization expenses, pre-hospitalization and post-hospitalization expenses and ambulance charges.
2- Medical insurance will not provide you with any add-on coverage while health insurance, on the other hand, offers add-on coverage such as critical illness, accidental disability, etc.
3- Medical insurance doesn’t offer any flexibility in terms of coverage whereas health insurance policyholders can reduce their policy duration, health insurance premium amount after a certain period, etc.
4- Medical insurance doesn’t provide the insured with the critical illness cover while health insurance provides the insured with critical illness cover for diseases like cancer, heart attack, etc.
5- In medical insurance, the pre-assured sum cannot exceed INR 5 Lakhs while in health insurance the limit is INR 6 Crores.
These were some of the differences between medical and health insurance policies. Different insurance companies have different benefits and the individual must take a wise decision before purchasing any policy. Both the above-mentioned policies are equally beneficial for the health-related issues and the thin line between the said policies must be understood well by the individual before making the decision.