Medical Loan vs Health Insurance: Which is Better?

Unexpected medical emergencies can place a significant financial burden on individuals and families. While health insurance is designed to cover hospitalisation and medical expenses, it may not always be sufficient to handle all costs. On the other hand, a medical loan provides instant liquidity to cover a wide range of expenses, including treatments not covered by insurance, post-hospitalisation care, or urgent medical procedures.

Both financial tools have their merits, and understanding their differences can help you make the right choice during an emergency. 

Understanding health insurance
 

Health insurance is a financial safety net that helps individuals manage medical expenses by covering hospitalisation, surgeries, and specific treatments. It involves paying a premium to an insurer, who, in return, covers medical costs as per the policy terms.

Benefits of health insurance:
 

Here are some of the key benefits of health insurance:

• Covers hospitalisation expenses and major treatments.
• Cashless treatment facility at network hospitals.
• Reduces financial burden on patients and families.
• Covers pre-existing diseases after a waiting period.
• Tax benefits under Section 80D of the Income Tax Act.

While health insurance is beneficial, it may not cover out-of-pocket expenses, alternative treatments, or non-network hospital bills, making an emergency medical loan a viable alternative in such cases.

What is a Personal Loan for Medical Emergencies?
 

A medical loan is an unsecured personal loan that can cover all kinds of medical expenses. These loans offer quick disbursal and flexible repayment options, making them a great solution for emergency medical situations. Utilizing a personal loan EMI calculator simplifies the process of determining affordable monthly payments for low-interest personal loans.

Benefits of a medical loan:
 

• No restrictions on usage - Can be used for hospital bills, post-treatment care, and medications.
• Instant approval and disbursal – No lengthy paperwork required.
• No need for collateral – Unlike secured loans, no assets are needed as security.
• Flexible repayment tenure – Choose flexible tenures as per your financial convenience.
• Covers non-network hospitals and alternative treatments.

Key differences between medical personal loans and health insurance
 

Here are some of the key differences between health insurance and medical loans:

When to use health insurance?
 

The following are the situations when a health insurance claim is useful:

• For planned surgeries covered under the policy.
• When treatment is at a network hospital with cashless claims.
• If you have adequate coverage to meet medical expenses.

When to opt for a medical loan?
 

Medical loans can prove highly useful in the following scenarios.

• When immediate cash is required for urgent treatment.
• If health insurance coverage is insufficient or does not cover a particular expense.
• For alternative treatments or post-hospitalisation care.
• If treatment is required at a non-network hospital.
• When waiting for an insurance claim and needing instant financial assistance.

Meeting medical emergencies with FIRSTmoney smart personal loan
 

IDFC FIRST Bank FIRSTmoney smart personal loan offers a fast and flexible way to handle unexpected medical expenses. Here’s why it stands out:

• Instant approval and disbursal – Get funds within minutes without any hassle.
• Flexible repayment tenure – Choose from 9 months to 60 months based on your budget.
• Zero collateral required – No need to pledge assets to secure the loan.
• Competitive interest rates – Starting from 10.99% p.a., making repayment affordable.
• Fully digital process – Apply online by displaying just your PAN card in the video KYC process.
• No foreclosure charges – You can prepay your loan without any extra cost.
• Instant loan amounts up to ₹10 lakh – Sufficient to cover urgent medical needs.

Conclusion

Both health insurance and medical loans play crucial roles in handling medical emergencies. While health insurance provides coverage for planned treatments and hospitalisation, a medical loan ensures immediate liquidity for any medical expense. A combination of both can provide the best financial protection.

When urgent medical expenses arise, and you need quick funds, IDFC FIRST Bank's FIRSTmoney smart personal loan is a reliable solution. It offers quick approval, competitive rates, and flexibility, ensuring that financial constraints never stand in the way of quality healthcare.