If you want to be healthy, being insured is a must. If you cannot afford medical expenses on your own, there are affordable health insurance plans available in the market. You can also take a medical loan to pay for the medical expenses. Both have their own advantages and disadvantages, and it is up to you to decide which one is suitable for your needs. The significant difference between a health insurance policy and a medical loan is that health insurance is bought beforehand, while a medical loan is taken after a medical emergency strikes. You may argue why you should spend money on health insurance when you don't claim healthcare facilities.
Health insurance is a preventative measure. You choose the coverage for the selected policy and pay a premium as per your budget.In that case of any accident or any health-related problems, the insurance company will pay all your medical expenses. Though you will need to contend with a waiting period of 30 days, purchasing health insurance is still warranted because of its immense coverage against unforeseen health emergencies. You can cover yourself financially by buying health insurance. A health plan is a substance you buy from an insurance company.
Even as loans are helpful during difficult times, would you not want to avoid them? After all, no one wants an unnecessary debt burden to reduce their savings. Also, a medical loan requires repayment to a bank or NBFC over a certain period. The repayment would involve interest besides the loan amount you may avail of.
Still, you may need clarity on the better alternative. Read on for the same.
Is Health Insurance a Better Choice Than a Medical Loan?
Generally, health insurance is considered more advantageous than a medical loan. Consider why a health insurance policy is better than a medical loan.
Avail Medical Facilities Instantly
Health insurance plans allow you to use medical facilities instantly (provided the 30-day waiting period is over) as they are issued directly. When you face a medical emergency, you must raise a health insurance claim, and your insurance provider will cover your medical costs. While you may have to do some paperwork to avail of the medical facilities, there is no time wasted arranging the money. However, if you are found to have a pre-existing disease (disease before buying the policy), the waiting period can stretch up to four years. So, if you seek treatment for the same during that 4-year period, you may find a medical loan more valuable. Under normal circumstances, health insurance will come to your rescue quickly. This may not be the situation if you conclude a medical loan as the lender/ bank will take some days to process the loan. Any delay in the loan arrangement will delay the treatment proving dangerous for the patient’s life.
More Affordable to Buy a Policy
Purchasing a good health insurance policy for your family is more affordable than taking a medical loan. You'll only need to pay a small volume as the premium for your health insurance policy annually.
Whereas with a medical loan, you'll have to pay easy monthly installments (EMI) for years, depending on your loan amount. There will be a difference between the premium you pay for a health insurance policy and EMI that you'll pay for the loan.
This is especially true if the hospitalisation or treatment continues for an extended period.
Read more - 5 Crucial Things to Consider Before Buying Health Insurance Online
Go for a Cashless Treatment
One feature of buying a health insurance policy is using cashless treatment at network hospitals the insurance company provides. Network hospitals are those that tie up with your insurance company and give cashless treatment facilities to the insured member of the policy.
Your health insurance company will pay your treatment cost directly to the hospital; if you mileage treatment at a network hospital. In that case, you can either pay the treatment cost on your own and get that reimbursed later or take a medical loan if you don’t have spare savings for such contingencies.
No Impact on Credit Score
Sustaining a good credit score is essential to using a loan. However, an unexpected medical loan can pose trouble to your credit score as the amount can be steep given the prevailing healthcare expenses. If you delay repaying the loan amount via the EMIs, it can lower and affect your credit score.
Tax Savings
Another reason you should choose a health insurance policy over a medical loan is that the former helps you save on taxes. As per the Section 80D of the Income Tax Act, the premium paid for a health insurance policy is eligible for tax deductions.
While aged citizens can save up to INR 50,000 per financial time, people below 60 years of age can use tax benefits on health insurance premiums for over INR 25,000 in an economic time. So when it comes to the medical loan, no similar tax-saving features are available on the medical loan EMI amount.
Read more - Things to Consider about Health Insurance and Tax Benefits
Range of Benefits
When you buy and choose a health insurance policy plan, you get many additional benefits from the coverage you have paid for. With health insurance, you can get annual health checkup benefits under certain facilities. You can also be eligible for accumulative bonuses if the scheme allows. Moreover, health insurances bring along the factor of long-term financial freedom. Still, no additional benefits are available if you choose a medical loan; hence, health insurance emerges as a better bet.
Conclusion
When a medical emergency hits, a health insurance policy and a medical loan can give you financial assistance to pay for the treatment. Health insurance is more affordable and provides more comprehensive benefits than a medical loan.
Thus, we recommend you buy health insurance to deal with any medical emergencies. You can also compare and get good health insurance plans online to get an intelligent deal. Ensure the health insurance coverage is high enough to accommodate your healthcare expenditure. Sometimes lack of adequate coverage can make you apply for a loan to cover the gap. So, picking the policy with the right coverage amount is critical.
