No matter how well you prepare your finances, you might find yourself in a financial crunch during a medical emergency. Most individuals find it challenging to afford high-quality medical care at the appropriate time because medical inflation is at its highest level. They thus rely on health insurance plans or an instant personal loan during such emergencies.
Both of these options have their perks.While an instant money loan can be used for any medical expenditure, health insurance works great as a precautionary measure. Getting a health insurance policy is a must as it covers big medical expenses against a very low premium. A personal loan comes in handy when your health insurance fails to meet your financial demands.
You can opt for a personal loan for dental treatment or cosmetic surgeries. Such costs are not covered by your health insurance policy. In addition to this, health insurance policies have many terms and conditions, like there is a certain waiting period, exclusions and several other terms. A personal loan does not have any such restriction. However, the only catch with a personal loan is that you have to repay the entire loan amount along with interest to the lender.
Read on to learn the differences between a medical loan and health insurance.
What Is a Personal Loan for Medical Emergency?
Medical loans are a type of personal loan that can be used for a variety of urgent medical requirements relating to an operation, surgical procedure, therapy, or other health-related conditions. Many banks and NBFCs offer medical loans these days.
What Is a Health Insurance?
Health insurance protects you against the unforeseen costs of medical emergencies. Depending on the conditions, either the insured pays the expenses upfront through cashless services orthe insurer settles the claim by paying in full or in part.
What Is the Difference Between Medical Loan and Health Insurance?
1. A preventive measure or an emergency solution
The primary distinction between a medical loan and a health insurance policy is that the former is acquired in advance while the latter is obtained in response to a medical emergency. People usually get health insurance as a preventative step. When you have a medical emergency, it guarantees that you will receive the necessary financial aid.
While a personal loan comes to your aid when you find yourself in a financial crunch during a medical crisis. With instant money loans, you can avail this loan quickly and without any hassles.
2. The amount of coverage
In health insurance, you select the amount of coverage and pay a premium against the coverage. You can select any amount of health insurance coverage depending on your premium affordability.
In the case of a personal loan, the maximum loan amount would depend on your loan eligibility and choice of lender. Your loan amount eligibility depends on your salary, credit score, current obligations, age and other factors. You can check your personal loan eligibility by using a loan eligibility calculator.
3. Waiting period and instant processing
Most health plans have a minimum 30-day initial waiting period, you won’t be able to file a claim during this term. Also, the waiting period for pre-existing diseases can go from 1 year to 4 years. There is also a waiting period for maternity coverage. However, this waiting period varies depending on the health condition and the health insurance company.
In case of a personal loan for medical emergencies, you can avail the fund as and when needed without any waiting period. With most instant loans processed digitally, you can get the loan amount into your account within 24 to 48 hours. However, you must meet the eligibility requirements and submit the documents correctly.
4. Restrictions in treatment
Having a health insurance policy offers you coverage against medical expenses, but it comes with many restrictions. Many health insurers in India do not offer coverage for dental treatment, skin treatment, cosmetic treatment or alternative treatment. You have to bear the entire cost. In addition to this, many insurers provide cashless facilities only at registered hospitals.
With a personal loan, you can use the loan amount in any way you deem fit. There is no restriction to end users with a personal loan. You can choose the course of treatment as well as the healthcare facility at your convenience.
Having the right health insurance policy is very important because it gives you a large coverage against a small premium.Your health insurance takes away the burden of bearing the medical expenses completely. It is highly affordable and protects your finances in case of a medical emergency.
A personal loan is a costly debt tool. You can avail the loan as and when needed and use it to accommodate any kind of expenses related to the treatment. But you have to repay the entire amount that you borrowed along with the interest.This means, though your loan helps you take care of your immediate needs, the cost of the medical expenses will ultimately hit your savings.
However, it is crucial to remember that the cost of health insurance rises if the policyholder has pre-existing diseases like diabetes, high cholesterol, etc. The insurance provider could increase your premium or decline to provide coverage based on your pre-existing condition.
6. Eligibility norms
Anyone who earns a salary or is self-employed is eligible to apply for medical loans. Health insurance is available to anyone despite their earning status. However, people who have existing diseases can opt for health insurance but they have to serve the waiting period. They cannot raise a claim during this waiting period.
Instant personal loan eligibility depends on your age, monthly salary, and employer,place of residence, credit score and ongoing debts. People in the age range of 21 to 58 with a minimum salary of Rs. 15,000 can apply for a personal loan. Your loan eligibility increases with the increase in your salary.
Your health insurer may require extensive documents to process your claim. Right from submitting your KYC at the time of buying the loan to furnishing all your medical bills correctly, you need to furnish a lot of documents. Missing out on these bills can result in claim rejection.
In case of an instant money loan,you do not require such extensive documents.You can avail this loan just by submitting your KYC and income details. You do not have to submit your medical bills to avail a personal loan.
Health Insurance or a Medical Loan—Which Is More Affordable?
In terms of affordability, health insurance is allegedly superior to medical loans. In exchange for paying aminimal annual payment for health insurance, you receive a number of perks, including NCB and other ways to lower premiums. However, with medical loans, you must make monthly payments for years in accordance with the loan amount, which is far higher than the premium cost. Additionally, insurance is much more useful if you require long-term care.
Benefits of Medical Loan
Here’s a list of the benefits of a medical loan:
- Simple to authorise.
- Quick disbursals.
- Only minimal documentation is needed.
- Offers flexible EMI.
- Unrestricted end-use.
- Can be availed online.
- It requires no collateral.
- It is available to all income groups.
Benefits of Health Insurance
Have a look at the benefits of health insurance:
- Covers large bills at a low price.
- Can be purchased online.
- Offers a free yearly basic health examination.
- Relieves you of financial pressure.
- Provides tax advantages.
- Offers cashless hospitalization.
- No impact on your credit score.
An instant personal loan for medical expenses and health insurance are both good options for covering your medical costs. They both have their pros and cons. When it comes to health insurance, it is the best preventive option to cover unforeseen emergencies at a minimal cost. However, the price of health insurance rises if you have pre-existing conditions like diabetes or high blood pressure. Also, there are several restrictions in the case of health insurance. There is also a waiting time for claim settlement.
An instant money loan gives you the freedom of unrestricted use and instant disbursals. You don’t have to pay any premium on medical loans;instead you have to pay the loan amount to the lender in the form of an EMI. Also, you have the liberty to choose the tenure and loan amount as per your needs.