Imagine your father suddenly requires hospital treatment. The doctors advise that he may need to stay in the hospital for a few days. Along with concerns about his health, another question arises: how will the family pay the hospital bill?
This is where health insurance can be very useful. However, when people begin searching for a policy, they often get confused between two terms: 'health insurance' and 'mediclaim.' Are they different? Is one better than the other? And which one should you choose for your family?
What is Health Insurance?
Health insurance is a policy that helps cover eligible medical expenses, subject to its specific terms and conditions. You pay a premium to the insurance company and in return, the company provides coverage as outlined in your policy.
Depending on the plan, this may include hospitalization costs, certain 'day-care' treatments, and eligible medical expenses incurred before or after hospitalization. Some plans also offer additional benefits.
For example, if you have a health insurance policy with a 'sum insured' of ₹5 lakh, the company may pay for eligible treatment expenses, provided they fall within the policy's limits, terms, and other conditions.
However, this does not mean that every medical bill will automatically be covered. The actual extent of coverage depends on the specific policy you have purchased.
What is Mediclaim?
The term 'mediclaim' is often used interchangeably with 'health insurance,' specifically referring to policies that cover eligible expenses related to hospitalization. Many people believe that 'mediclaim' and 'health insurance' are two completely different things. However, in common parlance, both terms are often used to refer to the same type of coverage.
The name alone does not indicate the extent of coverage a policy provides. A policy labeled as 'mediclaim' might offer robust coverage for hospitalizations, while a policy termed 'health insurance' could come with its own specific limitations and conditions.
The most important factor is to examine what the policy actually covers, rather than focusing solely on its name.
Health Insurance vs. Mediclaim: What is the difference? In India, the term 'mediclaim' is typically used for health insurance policies that cover hospitalization expenses. A policy cannot be judged as 'good' or 'bad' based on its name alone.The real difference lies in the specific benefits included in each plan.
Here are some key aspects to compare:
1. Coverage: Check whether the policy covers hospitalization, day-care procedures, and essential pre- and post-hospitalization expenses.
2. Additional Benefits: Some policies offer features such as the restoration of the 'sum insured,' annual health check-ups, or other optional covers. These provisions vary from one plan to another.
3. Limitations and Exclusions: A policy may include caps on room rent, co-payment requirements, or specific limitations and exclusions regarding expenses for certain illnesses. These factors can influence the amount the insurance company will pay. 4. Waiting Period: Coverage for certain specific treatments and pre-existing diseases is not provided immediately. Be sure to check the waiting period mentioned in your policy documents.
5. Premium: The premium amount depends on factors such as age, the sum insured (coverage amount), medical history, and the insurance company's terms and conditions. A lower premium does not necessarily mean it is the best option.
How does health insurance work? An example
Suppose Rohan purchases a health insurance policy with a 'sum insured' of ₹5 lakh. Later, he requires hospital treatment, resulting in a bill of ₹2 lakh.
If this treatment is covered under the policy and all conditions are met, the insurance company—following the claims process—can either pay the hospital directly or reimburse Rohan for the expenses he has incurred.
However, if the policy includes a 'co-payment' clause or sets specific limits on certain types of expenses, Rohan might have to pay a portion of the costs out of his own pocket.
This is why it is crucial to read the policy terms and conditions before purchasing insurance. While the 'sum insured' is important, it is not the only factor that determines the amount you will receive.
What is cashless treatment?
Cashless treatment is a facility where the insurance company pays the hospital expenses directly to a network hospital, subject to the policy terms and the approval of the claim.
This means you do not have to pay a large sum from your own pocket at the time of treatment. However, 'cashless' does not imply that every expense is free. You may still be required to pay for items that are not covered, applicable co-payments, amounts exceeding policy limits, or other non-covered expenses. Before any planned treatment, check the insurance company’s hospital network and understand the authorization process. In an emergency, follow the procedure specified by the insurance company as soon as possible.
Check these 5 things before purchasing a policy
1. Choose an appropriate sum insured. Consider your family size, location, likely hospital costs and budget. A policy that is sufficient for one person may not be enough for an entire family.
2. Read the waiting-period rules. Check when pre-existing conditions and specified treatments become eligible for coverage.
3. Understand co-payments and sub-limits. A co-payment means you pay a specified share of an eligible claim. A sub-limit caps the amount payable for a particular expense or treatment.
4. Check the hospital network. Make sure hospitals you may realistically use are included in the insurer’s network, particularly if you value cashless treatment.
5. Disclose medical information honestly. Share relevant health conditions and medical history when applying. Incorrect or incomplete information can lead to claim disputes.
