Medical loans and health insurance policies are popular financial sources meant for fulfilling medical needs. As the purpose does not differ, you may wonder: “Which one is better for me?” Well, to decide, know that both have distinct importance and are fairly different from each other.
Once the differences are identified, it will be easy to decide which one to choose and when. So, let’s explore the differences in this post.
Health Insurance versus Medical Loan: Meaning
Health insurance is a type of insurance product that covers the clinical costs of the one who is insured. According to the type of insurance policy and its terms, you first pay the medical bill and then obtain the reimbursement or the insurance company directly pays to the clinic or hospital.
On the other hand, medical loans are personal loans that are not secured. They are meant to pay medical arrears, sponsor your surgical procedures and other medical costs that a health insurance policy would typically not cover.
Health Insurance versus Medical Loan: Processing Time
It is easy to apply for a medical loan, as there is no lengthy procedure involved. The approval process is also faster than that of an insurance policy. Thus, disbursement is also quicker. However, in case of a medical insurance policy, you usually need to wait for a considerable period.
Health Insurance versus Medical Loan: Coverage
A medical loan usually covers a variety of surgical procedures related to dental, cosmetic and fertility. On the other hand, a health insurance policy will usually not cover them. It will not cover the procedures that are therapeutically unnecessary.
In short, the policy will reimburse only for the procedures or expenses covered, which will be as per the predetermined terms and conditions. For other medical expenses, you need to pay from your pocket.
Nevertheless, the loan you get is useful for paying all medical bills and debts, such as hospital room charges and doctor’s fees. There are no restrictions or confinements in case of using or getting a medical loan.
Health Insurance versus Medical Loan: Medical History and Age Criteria
In case of a health insurance policy, the eligibility criteria are stringent. It is only given to those who are healthy as well as have trivial to no medical history.
If you have survived cancer or undergone some surgery in the past, the insurance company considers you as an applicant with a significant degree of risk. In this case, the probability of disapproving the insurance application is high.
Even age is considered for calculating the premium. The greater the age, the higher is the premium.
However, there are no such restrictions in case of medical loans. You can avail of it even if you are a cancer survivor or have undergone some surgery in the past.
Health Insurance versus Medical Loan: Interest Rates
Medical loans are available at reasonable interest rates. You can even easily grab adaptable repayment options. However, an insurance policy usually will carry a high premium amount.
Health Insurance versus Medical Loan: Applicability
A medical loan is convenient only for paying your medical expenses or protecting the health of your family. In case of the latter, an emergency loan could be your reliable financial option. A medical loan is also preferable as a backup fund.
On the other hand, a health insurance policy is like taking a safety measure. You may pay the premium for years and end up without claiming even once. This is when you feel that all premiums have been wasted despite getting relief from tax.
Further, if your assured sum is claimed in a year, you cannot claim for any other medical expenses that may surface in the same year.
Conclusion Although a medical loan seems better, you can choose from the two as per your requirements.