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Benefits of Medical Loan over Health Insurance

There may be a lot of confusion about which is better; a medical loan or health insurance. However, the fact remains that each is its own products and it’s important that you know the differences between the two.

The basic difference is: health insurance is an insurance product whereas a medical loan is an unsecured personal loan. While this is the basic difference, there are quite a few more significant differences you need to take into account. 

What is a medical loan?

Medical loans are unsecured personal loans. They can be taken to finance your medical procedures, pay your medical debt, optional surgical procedures and other medically-associated costs that are not usually covered by your health insurance.

What is health insurance?

Health insurance covers the medical and surgical costs of the insured individual. Depending upon the terms of insurance coverage, either you pay the cost upfront and then the amount is reimbursed, or the insurance company pays the cost directly to the hospital.


Medical LoanHealth Insurance
Easy application process, faster approval and quick disbursal.Lengthy wait periods.
Competitive interest rates and flexible repayment options.High premium amount. 
Covers medical procedures like cosmetic surgery, dental procedures, fertility medical treatments, bariatric procedures, etc. that are not usually covered by health insurance. Do not cover procedures that are deemed as medically unnecessary or are not covered, subject to the terms and conditions of the health insurance policy.
The loan amount can be used to pay medical debt and other medical bills/expenses like paying the doctor’s fees, medical bills, hospital stay or a surgical procedure immediately.Covers only the procedure and medical expenses specified in the policy.

You have to pay for other medical expenses that the health insurance does not cover.

Can get a medical loan irrespective of the applicant’s current medical condition, or health history.

No illness limitations or restrictions; a medical loan is for everyone.

Only given to healthy individuals with clean medical history. Age of the individual is also a limiting factor.

If you have been through surgery or are a cancer survivor, you are considered a high-risk candidate and may be denied health insurance.

Hospitals may be willing to offer discounts if you are paying from your own pockets.  If an insurance company is involved, the hospital might not give you the discount.
A medical loan is taken only when in need of cash to pay for medical expenses.

You can keep a medical loan as an emergency backup fund for life.

Health insurance is taken as a precautionary measure.

You may end up paying health insurance premiums all your life without even using it even once.

In such cases, the entire premiums go wasted.

You can take a medical emergency loan as and when you need the cash to protect you and your family.If the sum assured is used up in an emergency in a year, you cannot take the benefit of the health insurance plan if another medical emergency strikes in the same year.

Now that you know the differences between the two and the benefits of a medical loan over health insurance, you can make an informed decision depending upon which is more profitable to you.

If you need a medical loan in India or a personal line of credit to plan a series of medical procedures which may or may not be covered under your health insurance, MoneyTap’s personal loan for medical expenses can help.

MoneyTap not only offers a competitive interest rate but also allows flexibility in repaying the personal loan EMIs. Get MoneyTap now!   

Shiv Nanda

Shiv Nanda is a financial analyst at MoneyTap who loves to write on various financial topics online. He also advises people on financial planning, investment choices and budgeting skills, and helps them make their financial lives better.

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