What are Indemnity Plans and Fixed Benefit Health Insurance Plans?

HEALTH INSURANCE



There are numerous reasons why diseases occur – sometimes it is due to medical history of a family or in majority of the cases it is environmental and lifestyle factors. Quality medical treatment is essential when it comes to tackling health problems. However, the exorbitant costs of healthcare in India pose as roadblock. Therefore, many families have realised the need to include health insurance costs in their budget.  

Still, there is another point which must be taken into account. As medical costs are escalating faster, choosing to increase your existing insurance cover is a good decision. 

Before that, one should also understand the type of health plans based on the ways they provide coverage. Fixed benefit plans are beneficial when it comes to providing an extra cushion to your existing plan. They, however, differ from indemnity insurance plans that come with many other benefits. 

What are Fixed Benefit Plans? 

As the name itself suggests, fixed benefit plans are plans which provide a fixed amount when the insured person raises a claim for a specific medical condition which has been insured. The amount is paid as lump sum irrespective of the actual or estimated medical expenditures.  

The health insurance plans act as an additional source of money for paying the medical bills. 

Some advantages of such plans are: 

  • They are useful when looking for covers for personal accident.
  • There are no sub-limits when getting coverage for the specific medical condition.
  • The lump sum amount enables the insured to meet various other minor or major non-medical expenses. 

What are Indemnity Plans?

Indemnity based plans are health plans that offer complete cover, maximum up to the sum insured, for the expenses incurred due to medical treatment. The medical expenses of the insured person are reimbursed when a claim is raised. However, indemnity health insurance plans, unlike fixed benefit plans, will offer reimbursement only for the actual or estimated medical expenditures. 

In such plans, there is a feature of deductible which is a specified amount the insured person must pay before starting to make claims. Regular health insurance and family floater policies are examples of indemnity based health plans. 

Some advantages if indemnity based plans are: 

  • Besides hospitalisation cover, the insured can get comprehensive coverage for a wide range of expenses including surgeries after submission of necessary proofs. 
  • The insured has the option to make multiple claims within the policy year until the sum insured is utilised. He or she can also opt for policy renewal. 
  • The option of cashless hospitalisation facility is available to the policyholder when he/she gets treatment in any of the network hospitals of the insurer. 
  • These plans are likely to have lower premium cost which is a major benefit.

Making a Choice Between Fixed Benefit and Indemnity based Plans

Both the fixed benefit plans and indemnity based plans have been designed to serve different purposes. When planning to buy a health cover, an individual must thoroughly assess the health risks and opt for a suitable policy. 

When the aim is to minimise the burden of hospitalisation costs arising from any kind of medical exigency including injury or ailments, indemnity insurance plans prove to be advantageous. For increasing the cover, one can chose a fixed benefit plan that will take care of some specified medical expenses. 

Fixed benefit plans, on the other hand, come with high premium but they become a necessity if one wishes to get specific coverage for a defined illness. These plans remain no longer valid once the claim is paid to the insured. So, building one’s financial cushion with an indemnity plan for other emergency expenses is a wise decision. 

It is time to assess your insurance needs and make the right selection from a wide range of health insurance plans. For your family’s well-being, opt for ‘Care’ a comprehensive family floater policy by Care Health Insurance (Formerly Religare Health Insurance).