Medical emergencies come to your door unannounced. Adding to the distress of such emergencies is the soaring medical inflation. The rising costs can definitely burn a hole in your wallet, if not today, then a few years later. For these reasons, it can be quite a financial challenge to avail timely and the right medical treatments. While medical loans are also available to fund these kinds of situations, there is a better alternative to be opted for here, and that is a health insurance plan.
If you are someone who is confused about whether to opt for a health insurance plan or take a medical loan, we have you covered. Continue reading to know more about it.
How does a medical loan differ from a health insurance policy?
A medical loan is a type of emergency funding that is obtained after a medical emergency strikes. Health insurance, on the other hand, is a type of safety net which is purchased in advance to protect one’s finances against medical ailments. While both provide a financial safeguard, a health insurance policy is preventative rather than a fire-fighting measure by way of a medical loan. *
Why is a health insurance policy better than availing of a medical loan?
Health insurance plans are considered a better option in comparison to obtaining a medical loan. Here are some reasons why it is so:
- Immediate medical treatment
Using a health insurance policy, you can avail of medical treatment immediately since it is also issued to cover specified ailments that are covered in the policy’s scope. Further, for health insurance plans, little time is spent on paperwork (informing the insurance company and filling up the claim form) to have funds arranged for the treatment. The same isn’t the case with a medical loan facility. You need to undergo an application process which can be long if you do not have the resources to pay for the treatment immediately. *
- Affordable
A health insurance policy is more affordable than interest payments on a medical loan. While the premium is only a small amount (depending on the coverage), the interest rate for personal loans can be higher. Further, you can avail of benefits, such as the cumulative bonus, that can help you to have higher insurance coverage for the same price. Additionally, health insurance plans cover a plethora of treatments and medical procedures. *
A medical loan will require you to pay for EMIs for years to come and the interest rate may vary based on prevailing lending rates. Moreover, the interest rate differs among financial institutions that offer loans. *
- Facility for cashless treatment
The primary advantage of a health insurance policy is the facility of cashless treatment. Using this feature, you need not worry about the treatment costs as the insurance company settles the medical bills on your behalf. This feature comes in handy if you do not have adequate resources to pay for the medical treatments. Individual policies, health insurance plans for family, and group insurance covers are some policies that provide the cashless treatment feature. *
A medical loan, on the other hand, does not allow you to pay for the treatment upfront. Instead, you are required to pay from your hard-earned savings or seek finance to pay for the treatment. Such a situation can be dangerous considering it is the health of a person at stake.
- Impact on credit score
Finally, a health insurance policy does not impact your credit score. Contrarily, a missed payment on your medical loan can have an adverse impact on your credit score. Thus, multiple insurance policies can be availed to cover specific ailments, if need be. The same cannot be true for medical loans as it impacts the credibility of the borrower. *
* Standard T&C Apply
While you decide which policy is the best fit based on your requirements, a health insurance premium calculatorcan be a nifty aid to help you make the right decision based on your requirements.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
