Health Insurance vs. Mediclaim
Himanshu and Sajeesh are both friends and colleagues working at a civil engineering firm. They often meet on weekends for lunch.
Last month, Sajeesh’s wife, Sujata, had a medical problem; the expenses incurred on treatment ended up diminishing his savings.
As a result of this unfortunate experience, he decided to buy a health insurance plan that covers medical emergencies.
Without making adequate enquiries or seeking advice from his financial advisor, Sajeesh purchased a health plan.
He decided that he would get his friend Himanshu to purchase a health plan too so that his friend does not go through the financial downturn that Sajeesh had experienced.
At the next lunch meeting when Sajeesh brought up the topic of health insurance, he was in for a surprise.
Sajeesh: Hey, how have you been?
Himanshu: I have been well. What about you? And, how Sujata’s health now?
Sajeesh: She is doing great. I am very happy today. I have finally got a health plan for my family and myself; a ‘Mediclaim policy’ that I had been looking at earlier. You should buy one too, Himanshu.
Himanshu: A Mediclaim policy? I thought you were buying a health insurance plan.
Sajeesh: Isn’t it just the same thing?
Himanshu: No, my dear friend; they are both different products. Mediclaim is a type of health insurance that only covers hospitalisation and treatment towards accident and pre-specified illnesses and that too only for a pre-specified limit. Health insurance provides a much deeper coverage; you get comprehensive health cover against hospitalization expenses along with pre and post-hospitalization expenses, ambulance charges and compensation for lost income. It also provides critical illness cover, personal accident cover, accidental disability cover, maternity expenses, etc.
Sajeesh: Okay, but I don’t need such a comprehensive plan right now, and my premium is based on the limit I have opted for. And, I get a tax benefit as well.
Himanshu: It is best to be prepared for the future. And, health insurance is far more flexible. You can reduce your health insurance premium amount after a specified period; you can even change your policy term after a certain amount of time has elapsed. The primary concern you should have while considering this type of insurance is health coverage and quality of care the plan provides. As for the tax benefit, you will get exemption under Section 10 (D) for premium paid for yourself/spouse/children up to Rs 15,000 per annum and another Rs 15,000 (Rs 20,000 if your parents are senior citizens) if you are also paying for your parents.
Sajeesh: Oh! I think I made a mistake; I should have consulted someone before I opted for a health plan.
Himanshu: Don’t worry Sajeesh; you can always purchase an additional policy because your mediclaim will protect your family to an extent. For a deeper cover, you can opt for a health insurance policy.
Sajeesh: Thank you for letting me know the difference between mediclaim and health insurance, friend; you are well-informed.
Himanshu: Its not just you, many people think it's the same thing.
Sajeesh: I thought I would guide you about the need to purchase health insurance, but, it was the other way around! You have guided me!
Sajeesh and Himanshu parted ways after lunch. Sajeesh decided to go visit his financial advisor. He decided that he wanted a flexible and comprehensive cashless medical insurance plan. Sajeesh’s mind was made up; he would give his family the best they deserve and he would definitely not make the mistake of buying a health policy without doing research ever again.