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Personal Loan for Medical Emergency v/s Traditional Health Insurance - Difference Explained!
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In spite of taking care of your health, there could be times when you need emergency medical assistance and hospital admission for you or your family. Unfortunately, with the inflation rate, medical expenses can exhaust your savings. Experts recommend taking as it can help you build a safety net against the high cost of hospital bills and medicines. But they also vouch for a medical loan for medical emergencies, considering the various limitations of health insurance policies. The choice between the two can be confusing which can affect your decision.
Here is a brief guide on the difference between a personal loan for a medical emergency and traditional health insurance to help you make an informed decision.
Health insurance is an insurance policy where the insurance company covers the expense of medical treatment and hospital bills. Depending on the policy and insurer terms, you can either pay the bills or get a reimbursement from the insurer, or the insurer can directly pay the expenses to the hospital.
A personal loan for a medical emergency is an unsecured loan that you can avail from a bank or financial institution at certain interest rates. You can use it to pay your medical expenses and repay in equated monthly installments.
Difference between Medical Loan and Health Insurance
When you are dealing with a medical emergency, time is a crucial factor. However, the process of utilizing a health insurance policy could be comparatively time-consuming. On the other hand, if you fulfill the eligibility, you can get the approval of a personal loan quickly. With minimum documentation, and easy eligibility, you can get the amount with a few clicks.
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Health policy may or may not cover all your medical expenses. As a result, you can face a lack of funds despite being medically insured. There are no specific terms on the usage of medical loans. You can use the funds to pay for any treatment, disease, surgeries, bills, therapy, etc.
There is a stringent eligibility requirement for buying health insurance. Keep in mind that those with pre-existing diseases may find it difficult to get health insurance coverage. Even if you do get insurance with such conditions, the premiums are too high. For medical loans, you need to meet basic eligibility of age, income, credit score, etc. There are no health-related criteria for availing medical loans.
When you buy a health insurance policy, you need to pay the premium irrespective of whether you use the insurance amount or not. On the other hand, you can take a medical loan when you need funds.
There are lots of terms and conditions associated with a health insurance policy. If you are not aware of its nitty-gritty, the insurance policy might not be useful. Comparatively, a medical loan is much easier to understand and use. You can use the funds at any hospital and for any treatment. Therefore, in times of medical crisis, a personal loan for a medical emergency could be a better choice. However, ensure that you check your affordability by using a personal loan calculator before applying for one.
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