Medical insurance products have complex benefit structures and policy terms requiring professional medical knowledge, making it difficult for consumers to understand a product, let alone compare across products.
To allow comparisons across products, 10Life focusses on the medical coverage of selected medical cases and auxiliary benefits when evaluating medical insurance (private room). The top tier with highest medical coverage and auxiliary benefits can be awarded as “5 Star Product”.
While both is often categorised under “health insurance”, they are very different in nature.
Medical insurance is also known as hospitalisation insurance. The main purpose is to cover the medical expenses if the insured is hospitalised, with some products also covering specific outpatient treatments. Claims are on an expense reimbursement basis, on the condition that the expense is “Medical Necessary”.
Critical illness insurance covers the insured against specified diseases. A lump sum benefit is paid if the insured is diagnosed with a specified disease that matches the definition in the policy provisions. In general, insurance companies do not limit the usage of the benefit payment.
Traditional medical insurance defines coverage limits item by item, e.g. room and board, surgeon fee, miscellaneous fee, etc… If the medical expense on particular item exceeds the limit, one may recover the excess from Supplementary Major Medical (if available, and after any co-payment), and any further excess needs to be paid out-of-pocket by the insured.
“Full Coverage” medical insurance generally does not limit the coverage amount in a single item. The medical expense can be covered as long as it does not exceed the per policy year, per disability or lifetime limit. However, the relevant medical expense needs to be “Medical Necessary” and “Reasonable and Customary”.
The deductible is what the amount the insured needs to pay out-of-pocket first, while the insurance company covers the medical expense in excess of the deductible. For example, for a policy with a $10,000 deductible, if the eligible medical expense $50,000 the insurance company would only pay $40,000.