What is Mediclaim?
Medical insurance or
‘Mediclaim’ as it is commonly known in India provides financial cover to
individuals for treatment of medical conditions, diseases and accidents.
Medical insurance is offered by non-life insurers(also known as health insurers) as well as life insurers.
Following are the two main categories of mediclaim:
1. Individual Mediclaim
The most basic form of Medical Insurance is the individual mediclaim. If there are four family members with individual covers of Rs 1 lakh each, each member can claim reimbursement for up to a maximum of Rs 1 lakh. Each individual mediclaim policyis capped at the sum assured which is the maximum the insured can claim towards treatment.
2. Family Floater Policy
The best family health insurance plans do away with the biggest shortcoming of the individual policy – the fixed sum assured. There is a floating sum assured for each member with a cap for the family as a whole.Going by the previous illustration – a family floater policy for Rs 4 lakhs allows any family member to claim medical benefit for more than Rs 1 lakh so long as it is within the overall sum assured of Rs 4 lakhs. This way if two family members need medical treatment in a year amounting to Rs 4 lakhs, the family floater with Rs 4 lakhs sum assured proves useful. With independent mediclaim the members would have been eligible only for Rs 2 lakhs benefit and would have had to fork out the balance Rs 2 lakhs on their own.
The amount paid towards medical insurance premium for self/spouse/children provides tax exemption under Section 80D for a maximum of Rs 25,000. There is an additional benefit of Rs 25,000 on mediclaim premium for parents (Rs 30,000 if parents are senior citizens).
Exclusions An exclusion is a disease or medical condition not covered by medical insurance. Usually mediclaim becomes valid after 30 days of applying for the policy. So diseases contracted within the first 30 days are not covered by the medical insurance policy.
Some medical conditions and treatments that are not covered by mediclaim at any stage include:
- a. Pregnancy and child birth
- b. Sexually transmitted diseases (STD)
- c. HIV/AIDS
- d. Dental treatment except as a result of accidents
- e. Cosmetic surgery
- f. Cosmetic, aesthetic and obesity related treatment
- g. Plastic surgery unless required to treat injury or illness
- h. Vaccination and inoculation
Although, this is how exclusions work broadly, they differ across insurers and it is a good idea to ask a lot of questions before finalizing the medical insurance policy. If you do not have a precise idea of how exclusions work, you will end up paying for the medical expenses,if it falls under an exclusion.
If the expenses towards medical treatment are approved by the insurance company, the insured is reimbursed subject to the sum assured.
Insurers provide cashless mediclaim policy which makes it easy for the insured to claim expenses without payment of cash. This is so long as he is treated at hospitals included in the insurance company’s network. The insurance company makes the payment directly to the hospital subject to specified terms and conditions.
If the policy does not provide cashless facility, the insured will have to foot the bill himself and then claim the money from the insurance company, assuming the expenses are approved by the insurance company.
What is the Difference between Mediclaim Insurance and Health Insurance?
Let’s explore how health insurance is different from mediclaim insurance.
|Offered Coverage||A mediclaim plan provides coverage only for hospitalization, accident-related treatment and pre-decided diseases for a pre-specified limit.||A health insurance plan offers comprehensive coverage against hospitalization charges, pre-hospitalization charges, post-hospitalization charges, ambulance expenses. Additionally, it offers compensation in case of loss of income as a result of an accident.|
|Add on Coverage||It doesn’t offer any add-on coverage.||In order to enhance the insurance coverage, it offers critical illness coverage, personal accident coverage, accidental disability coverage, maternity coverage etc.|
|Flexibility||When it comes to coverage, it offers no flexibility.||On the other hand, a health insurance plan offers much-needed flexibility. Insurance buyers can reduce their health insurance premium amount after a specified period; they can even change their policy duration. They can avail long-term policies to enjoy maximum insurance benefits.|
|Plan Features||Features of a mediclaim plan vary insurance provider to insurance provider. Generally, different mediclaim insurance companies offer different mediclaim insurance coverage.||Generally, the benefits and features of a health insurance plan of a specific sum insured are the same over most insurance providers.|
|Critical Illness Cover||It does not provide coverage for critical illnesses.||It provides critical illness coverage for more than 30 plus critical diseases such as cancer, stroke, kidney failure, etc.|
|Sum Assured||The sum assured for a medical insurance plan doesn’t exceed 5 Lakh Rupees.||The sum assured for a health insurance plan doesn’t exceed 6 Crore Rupees per year. That is to say, health insurance provides extensive coverage.|
|Claims||In the mediclaim plan, a policyholder can file claims until the total amount assured is exhausted.||In health insurance, when claims related to critical illness/ accidental disability coverage arise, the assured sum is paid in lump sum. Ergo, such claims can only be made only once during the entire policy duration or once during the policy tenure. Other than that, an insured can file claims as long as his/her sum insured isn’t exhausted.|
|Hospitalisation||In order to avail mediclaim benefits, it is necessary that the insured gets hospitalized.||In order to avail health insurance benefits, it is not necessary that an insured gets hospitalized. Benefits like day-care procedure cover can be availed without getting hospitalized.|