In our ideal world, we always want to be young, healthy, and happy.
Unfortunately, in the real world, the scene is different. Health
issues may crop up at any time so we should be prepared to face them
in the best possible way.
Aside from emotional and physical
trauma, medical emergencies can be very costly. There are ways to
handle your life savings without draining them. Banks and non-banking
finance companies (NBFCs) offer personal loans for
medical emergencies that can help pay for all healthcare costs.
Another approach is to purchase health insurance that covers the
medical expenses incurred.
Let’s discuss these two options, the
differences between the two, and their respective benefits so you can
make an informed decision about your healthcare.
Personal Medical loan

Medical loans fall under the category of personal loans which can
be obtained for various health-related contingencies or urgent medical
needs related to the operation, surgical procedure, treatment or other
health related ailments. It is expanded by banks, NBFCs, and
lenders.
Health insurance
Health insurance is insurance that
covers full or part of the risk of a person bearing medical expenses.
Depending on the terms, either the insured pays for the costs and is
later reimbursed, or the insurance company pays the care provider directly.
What is the difference?
A medical loan is taken out as a personal loan after suffering an
unforeseen illness to cover expenses, while health insurance is
purchased as a precautionary measure in case of an accidental
strike.
A medical loan covers all expenses - hospitalization,
prescription bill, surgery, or any other treatment. You can use the
money as you see fit for your healthcare. Health insurance covers
costs depending on the type of insurance and the amount of
insurance. For example, health insurance only covers hospital
admissions and can leave a serious illness. In addition, if you have
insured for Rs 5 lakh, he will reimburse only that amount. Anything
above that you must pay.
A medical loan is a personal loan that
must be repaid on an EMI basis as it is convenient for the borrower.
Health insurance, on the other hand, is an annual purchase to help
reduce the risk of exposure to health costs.
What about the cost factor?
You only need to get a medical loan when you need it. It is
important to buy health insurance every year regardless of whether you
are healthy or sick. This can be costly as approximately Rs. 20,000
per year is not easy for everyone and may not be feasible for
everyone
A medical loan is given to any salaried, self-employed
person or pensioner. Health insurance is offered to relatively healthy
individuals. No one undergoing major surgery like a bypass can get
health insurance at the 11th hour.
Please note that we are not undermining the importance of health insurance for an individual. Everyone must have sufficient health insurance cover and there should be no compromise on that. However, there are some instances where health cover may not be sufficient to cover all the expenses of a medical emergency. In such situations, a Personal Loan can come to your aid to cover the costs over and above your health cover.
List of Advantages of personal medical loan
- Easy to approve and process
- Only basic documents are
required
- Covers any costs
- Collateral free loan
- Can
be paid in easy instalments
- It can be availed by any earner
- Disbursed in a short time
- Provides flexible working time and
EMI
- It can be avail up to Rs 25 lakh or even higher, depending
on the lender.
Advantages of health insurance
- Provides cashless hospitalization
- Covers big bills at a
small cost
- Saves you from financial stress
- Can easily be
bought online
- Gets you tax benefits
- Provides free annual
basic health checkup
Benefits of getting a medical loan:
Quick Approval - The last thing you want
during a medical crisis is to get caught up in a financial process
that takes a lot of time to disburse. Medical loans are approved
quickly, and you don't have to worry about the loan approval
process.
Covers any ailment - Medical loan
can be obtained for any ailment. From long-term medical treatment
procedures such as chemotherapy to dental surgery, these loans are
for any type of healthcare. You need to evaluate and apply the total
cost for a given amount.
Flexible repayment
period - Medical bills can be very high and therefore,
raise your monthly budget. Medical loans allow you to choose from a
flexible tenure. The loan amount can be repaid in monthly
instalments during the selection period. Generally, most banks offer
a term of up to 5 years.
No collateral - Unlike
most other types of loans, you do not need to provide collateral for
a medical loan. This means that you do not need to generate any
security against which the loan is offered. The no-collateral
benefit is great because you don't have to stress over the need for
collateral during the effort.
Difference between a medical loan and health insurance?
While both health insurance and medical loans can be used
partially or in full to pay your medical bills, they are
different.
In simple words, health insurance is purchased as a
precautionary measure to cover future health expenses. In contrast,
a medical loan is taken out after a medical emergency has already
struck the person. In both cases, you must pay regularly, although
the range of payments is different.
In health insurance, you pay
a regular premium to continue getting medical cover from the
insurer. A medical loan, on the other hand, is a debt that you must
repay with interest after receiving the loan amount.
To conclude
Both health insurance and medical loans are effective ways to
cover medical expenses. There are some drawbacks when it comes to
health insurance. If you have ailments like high blood pressure or
diabetes, the cost of health insurance increases. Those are the
chances that you will be completely rejected. If you have had major
surgery, no company will cover you. There are a lot of technical
'ifs' and 'buts’, So, if you do not understand the insurance you are
buying, you are likely to lose money in times of crisis. For
example, your insurance can only cover hospitalization charges and
does not cover purchased medications. While cashless insurance
products are available, some ask you to cover all costs and then
submit the documents to get a refund. Here, arranging money for your
treatment immediately becomes a challenge, and later, it is tedious
to follow up with an insurance company to clear your claim.
If
getting health insurance is not part of your plan, does not fit into
your budget, or you do not qualify (say, if you have had major
surgery), a medical loan can be your saviors. Poonawalla Fincorp
provides personal loans for medical emergencies, with affordable
interest, minimal documentation, and quick disbursal. They also give
proper advice on loan repayment based on the financial capacity of
the borrower.