What Is The Difference Between Health Plan And Health Insurance?

Priyanka Sharma

27 Jun 2017

New Page 1

While discussing health covers, people generally get stuck on a split road, both looking identical. On one glance, the terms Health Plan and Health Insurance seem the same. This exactly is where an untrained eye is mistaken. In reality, the difference in between these two terms is as wide as the difference in sea water and fresh water.

A Health Plan (also known as mediclaim) is basically a health cover that covers the cost incurred during one's hospitalization. On the contrary, a Health Insurance is a broader health cover that covers everything beginning from the diagnosis of the illness.

Broadening the Horizon

As mentioned earlier, a Health Plan can only be triggered when the covered person is hospitalized. The cost that the insurance company is payable is only the hospital's final bill, which generally excludes certain consumables. Normally, the cap for a Health Plan is usually less, falling somewhere around Rs 5 Lakhs. There are different kinds of Health Plans specifically tailored for every man's need. A family man would find it easier to buy a Health Plan that covers his family of four. Senior citizens have special benefits that tag along with their mediclaim.

Lately, certain Health Plans do offer a combined plan for distant relatives as well. Also, one can request for any number of claims until the insured amount exhausts. For instance, a man claimed Rs 2 lakh in hospital bills for his knee surgery, while the sum insured is Rs 5 lakhs. In such a case, he is eligible to put forward another claim in case of another hospitalization, for there is still a sum of Rs 3 lakhs remaining as a cover.

Health Insurance works in a highly broader field. It doesn't just cover one's hospitalization bills, but even takes care of the pre and post hospitalization cost. Just like in a critical illness policy, Health Insurances take care of the loss of income suffered when the family's breadwinner is diagnosed with an illness that is financially detrimental as well. Falling at a range of Rs 60 lakhs, the limit over the assured sum of money is pretty vast.

It is not necessary to be hospitalized in order to extract a claim in case of Health Insurances. All you need to do is show a proof of the diagnosis of that particular illness and the job's done. There is no purpose in making multiple claims here for the insurance company pays you a lump sum amount once the claim is proven.

Summing It Up

No matter how lucrative one sounds than the other, both the plans come equally handy when you compare a person's need. A thorough discussion with your advisor is something that would make you sure of a particular health cover policy. Apart from these, Health Plans and Health Insurances also provide you pre-defined tax benefits. A visit to the doctor no more is an agony on your financial health.

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Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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What Is The Difference Between Health Plan And Health Insurance?

Priyanka Sharma

27 Jun 2017

New Page 1

While discussing health covers, people generally get stuck on a split road, both looking identical. On one glance, the terms Health Plan and Health Insurance seem the same. This exactly is where an untrained eye is mistaken. In reality, the difference in between these two terms is as wide as the difference in sea water and fresh water.

A Health Plan (also known as mediclaim) is basically a health cover that covers the cost incurred during one's hospitalization. On the contrary, a Health Insurance is a broader health cover that covers everything beginning from the diagnosis of the illness.

Broadening the Horizon

As mentioned earlier, a Health Plan can only be triggered when the covered person is hospitalized. The cost that the insurance company is payable is only the hospital's final bill, which generally excludes certain consumables. Normally, the cap for a Health Plan is usually less, falling somewhere around Rs 5 Lakhs. There are different kinds of Health Plans specifically tailored for every man's need. A family man would find it easier to buy a Health Plan that covers his family of four. Senior citizens have special benefits that tag along with their mediclaim.

Lately, certain Health Plans do offer a combined plan for distant relatives as well. Also, one can request for any number of claims until the insured amount exhausts. For instance, a man claimed Rs 2 lakh in hospital bills for his knee surgery, while the sum insured is Rs 5 lakhs. In such a case, he is eligible to put forward another claim in case of another hospitalization, for there is still a sum of Rs 3 lakhs remaining as a cover.

Health Insurance works in a highly broader field. It doesn't just cover one's hospitalization bills, but even takes care of the pre and post hospitalization cost. Just like in a critical illness policy, Health Insurances take care of the loss of income suffered when the family's breadwinner is diagnosed with an illness that is financially detrimental as well. Falling at a range of Rs 60 lakhs, the limit over the assured sum of money is pretty vast.

It is not necessary to be hospitalized in order to extract a claim in case of Health Insurances. All you need to do is show a proof of the diagnosis of that particular illness and the job's done. There is no purpose in making multiple claims here for the insurance company pays you a lump sum amount once the claim is proven.

Summing It Up

No matter how lucrative one sounds than the other, both the plans come equally handy when you compare a person's need. A thorough discussion with your advisor is something that would make you sure of a particular health cover policy. Apart from these, Health Plans and Health Insurances also provide you pre-defined tax benefits. A visit to the doctor no more is an agony on your financial health.