Does medical insurance cover critical illness?

Yes, it covers the critical illness but only if it needs in-patient hospitalization.

Is health insurance the other name for a mediclaim policy?

No, both these terms are quite different as they cater to different needs of the policyholder. Health insurance is more wholesome in terms of coverage whereas, mediclaim only covers hospitalization expenses.

Is daycare covered by a medical insurance?

No, daycare is not covered in a mediclaim policy.

Which is best- health insurance or medical insurance?

Health insurance is an ultimate plan that provides you with comprehensive coverage. It’s always a good decision if you buy a health insurance plan instead of mediclaim.

How does a mediclaim policy settle a claim?

While receiving treatment for a specific health condition, you need to pay your medical bills out of pocket. Later, your insurer will give you the reimbursement amount after you make a claim.

Written by Simran Nirala

Published: 12 Aug 2024

Updated: 24 Jun 2026

5 min read

Expert Verified

IRDAI Licensed

Difference Between Health Insurance and Medical Insurance

Have you ever seen oil and water mix? No, right? Because the density of both elements is different. Similarly, two terms in the insurance sector often create confusion: Health Insurance and Medical Insurance. Most people get confused and consider both plans the same. But let us explain why these two are separate sides of the 'insurance' coin.

This guide will discuss how a health insurance policy and a mediclaim (medical insurance policy) differ from each other. Apart from this, we'll read about the features, benefits, and similarities of both.

What is Health Insurance?

A health insurance plan provides comprehensive coverage for your medical expenses, including hospitalization, doctor's consultation, daycare procedures, maternity, ambulance charges, medicines, and more. It directly pays out or reimburses all incurred expenses from your sum insured, so you don't have to pay anything on your own. Types of health insurance include individual and family health plans, group health insurance, senior citizen plans, critical illness policies, and personal accident insurance.

For more information, read more on What is Health Insurance?

What is Medical Insurance?

Medical insurance, or a mediclaim policy, is quite different from health insurance because it provides a pre-decided coverage benefit for a specific critical illness or medical condition for which you are buying the policy. While the insurer of your mediclaim policy settles the medical bills directly, you can enjoy the perks of this plan anytime under several terms.

The only condition here is that you cannot exceed the limit of your sum insured in a mediclaim policy.

Features of Health Insurance and Medical Insurance

Here we will see the properties of health and medical insurance policies:

Key Features	Health Insurance	Medical Insurance
Comprehensivity	Depending on the plan, it covers expenses related to hospitalization, medications, doctor's consultation, pre and post-hospitalization, and bed charges.	It covers critical medical treatment and hospitalization related to the procedure that you have particularly opted for.
Claim Settlement	You can claim as many times as you require during the policy year until your sum insured limit is exhausted.	You can claim as many times as you need, but only until you exhaust your total sum insured.
No-Claim Bonus (NCB)	Health insurance plans generally offer a no-claim bonus on the renewal of your policy.	Mediclaim policies generally do not have a no-claim bonus benefit, but depending on the plan, you might get an NCB.
Tax Exemption	You can avail of tax deduction benefits under Section 80D of the Income Tax Act of India.	Tax benefit under Section 80D of the Income Tax Act is applicable.
Cashless facility	The insurance company settles the medical bills or provides reimbursement.	Either you can receive the cashless hospitalization facility at network hospitals, or medical bills are reimbursed post-treatment.

What is the Difference Between Health Insurance and Medical Insurance?

Read below to know the differences between health insurance and mediclaim insurance:

Aspects	Health Insurance Policy	Medical Insurance
Pre & post hospitalization	It broadly covers before and after medical expenses along with hospitalization for a disease.	It covers a specified period of medical treatment particularly for a health condition and not the entire pre & post-expenses.
Sum insured	It has a higher sum insured because it provides comprehensive coverage for multiple health conditions.	The sum insured is comparatively lower than health insurance.
Additional Riders	You are free to add as many riders as you require on an extended premium amount.	You cannot add any riders as these plans are not comprehensive.
Ambulance services	Most health insurance policies cover or reimburse ambulance charges up to a decided limit out of the sum insured.	Mediclaim plans generally do not provide coverage or reimbursement for ambulance services.
Daycare procedures	It covers general costs of treatment like consultation, daycare procedures, medication, and diagnosis.	Treatment cost is only covered for medical conditions when ATD (Admission, Treatment, and Discharge) is applicable.
Affordability	Premiums are usually higher as they provide coverage for multiple health situations.	Premiums are often lower than a standard health plan since it has no comprehensive coverage benefits attached to it.
Customization	You can customize your health plan according to your needs, even after buying the policy.	There are not many options for customization in a mediclaim policy as it only covers a pre-decided medical condition.
Maternity benefits	It covers health conditions related to maternity (normal and caesarean).	Maternity expenses or any related medical condition are only subject to the specifications of a plan.
Exclusions	Alcoholism, breach of law, war or nuclear emissions related causes, dangerous sports, congenital disease, attempt to suicide, beautification treatment such as dental care, liposuction, and related surgeries are excluded.	All the exclusions of health insurance plus daycare procedures are generally not covered.

Which is Better - Health Insurance or Medical Insurance?

For individuals who want wholesome coverage for their medical requirements like hospitalization, medication, doctor's consultation, maternity cover, ambulance charges, etc., health insurance serves them best.

For those who want coverage only for hospitalization but not overall comprehensive coverage, they can opt for a mediclaim policy.

Wrapping It Up

Buying health insurance not only secures the health of you and your loved ones but also saves you from excess expenditures in times of distress. The conversation of health insurance vs. medical insurance policy always gets fired up. So, let's finally end this discussion. Health insurance and medical insurance can work wonders, but it depends on your medical requirements and which suits you best.

Are you still confused? Worry not. You can reach out to our expert advisors at PolicyX.com for detailed guidance.