Medical Emergency Loan

Understanding the Benefits of Personal Medical Loan over health insurance

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.

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 a 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.

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