What is the difference between mediclaim and health insurance?

Health insurance policies are usually called mediclaim policies because in earlier years, when the health insurance concept was new, there were few health insurance policies in the market and they went by the name of mediclaim. 

Even today, when there are hundreds of health insurance policies available in the market, many think that health insurance and mediclaim are one and the same. This is, however, not true. Let’s understand why.

Mediclaim v/s health insurance 

Mediclaim policies are indemnity health insurance plans which pay for the actual medical expenses incurred by the policyholder. These plans cover expenses incurred when the insured is hospitalised and the maximum claim is limited to the sum insured of the plan.

Health insurance, on the other hand, is a wider concept. It does not only include indemnity oriented mediclaim plans which pay for the actual medical expenses, but also includes other types of coverage options. You can find the following types of health insurance plans in the market besides the popular mediclaim policies:

  • Critical illness health plans which pay a fixed benefit on the diagnosis of a critical illness covered by the plan
  • Hospital cash plans which pay a fixed benefit on a daily basis if you are hospitalised for a continuous period of 24 hours or more
  • Top-up and super top-up health plans which supplement an existing health insurance coverage at very low rates of premiums
  • Disease-specific health plans which are designed to cover specific ailments
  • Group health plans which cover multiple members of a group under a single plan
  • Senior citizen health insurance plans which cover the medical expenses incurred by senior citizens.

Besides the different types of health insurance policies, there is a difference in the coverage benefits as well as the coverage level between mediclaim and health insurance. Mediclaim plans pay only for hospitalization expenses of the insured. This means that only when the insured is hospitalized would mediclaim plans come into the picture. Moreover, the sum insured under these plans is also limited to an extent which can be INR 5 lakhs or INR 10 lakhs. In case of health insurance plans, however, not only is there wider  scope of coverage, the sum insured levels are also higher. Under health plans you can get coverage for hospitalization expenses as well as for other types of medical expenses like pre-hospitalization expenses, post-hospitalization expenses, ambulance costs, day care treatments, etc. The sum insured levels are also high and can go up to crores. There are additional optional coverage benefits too which you can select for enhancing your coverage and health insurance plans also allow you premium discounts. These features are absent from mediclaim policies and so such policies are quite different from health insurance plans.

So, we can conclude that mediclaim is a subset of health insurance or a type of health insurance policy while health insurance is a wider and more comprehensive concept.