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Understanding Indemnity Health Insurance: A Comprehensive Guide

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Indemnity health insurance plans are insurance plans where the insurer bears the actual cost of hospitalisation up to a predefined limit. These policies come with both cashless settlement and claim after payment. Moreover, it's the most common health insurance policy sold in India. You can opt for an indemnity health plan as an individual and a family floater plan.

How Indemnity Plans Work?

Let's take a simple example to understand how an indemnity health insurance policy works. Suppose you buy an indemnity health policy and get hospitalised. In that case, all the hospitalisation costs will be settled directly by the insurer and sent to the hospital in case of a cashless claim. Moreover, in the case of a reimbursement claim, the amount will be credited to your account. However, this type of policy doesn't cover the amount of deductibles. Hence, the cost of deductibles must be paid by you.

So, if the hospitalisation cost has come to around ₹3.25 Lakh, including ₹25 thousand worth of deductibles, the insurance company will settle the ₹3 lakhs, and you will pay the remaining. Also, there's always a predefined limit, as we discussed above. So, if the upper limit is ₹5 lakh, then any amount above ₹5 lakh should be paid by you, even if there are no deductibles.

What are the Benefits of Indemnity Health Insurance?

Let's now look at the benefits of an indemnity health insurance plan. While it comes with all the other features that regular health insurance has, like cashless claims, it has some other benefits that make it better than regular health policies.

• Clears the Full Bill

Unlike regular health insurance, the indemnity plan coverage is different. It reimburses or settles the full bill without any ifs and buts up to the sum insured. So, there are no upper limits for every disease. For example, if you make a claim for hospitalisation for heart surgery, then in regular policy, a fixed amount will be reimbursed out of the total sum insured. But with indemnity, the full bill will be reimbursed up to the sum insured.

• Infinite Number of Claims

With a regular health insurance policy, you can mostly make a single claim per disease. However, in an Indemnity policy, you can make unlimited claims up to the sum insured.

• Flexibility to Choose Healthcare Provider

With an indemnity plan, you are not limited to a network of healthcare providers. You can choose the provider yourself at your convenience.

• Lower Premiums

The only way to pay lower premiums by default is when the insurer's risk is low. In indemnity health insurance, the insurer's risk is lowered because you pay for the deductibles. This results in lower premiums for the same coverage as a regular health policy.

Who Could Benefit from an Indemnity Plan?

Anyone who wants a comprehensive coverage plan, where most of the hospitalisation bill is covered without any upper limit based on diseases, can opt for indemnity. Indemnity health insurance policies also provide you with the flexibility of payment and cashless claims. So, it doesn't lack any aspects of a good health insurance policy.

Understanding Indemnity Plan Costs

The costs of an indemnity plan are not very complex. You just have to pay the premium of the health policy, just like other types of health policies. However, you must pay the deductibles yearly before the insurance company pays the hospitalisation bill. For example, if the deductible cost is ₹25000, then the first ₹25000 of payment towards the medical expenses will be made by you, and after that, the insurer will take care of the insured limit.

How to Find and Enrol in an Indemnity Plan?

You can find indemnity health insurance plans online from reputed health insurance companies like HDFC Ergo. To buy an indemnity health plan:

1. Navigate to HDFC Ergo's health insurance page.

2. Find the policy according to your needs, like an individual plan, family floater plan, etc.

3. Fill in the details online and have successfully covered yourself with an indemnity plan.

Tips for Maximising Indemnity Plan Benefits

Here are some tips that you can use to maximise the benefits of your indemnity plan:

• Negotiate for a Better Premium

You can negotiate with the insurance company to provide a better premium if you have a clean medical history.

• Choose the healthcare provider wisely

You should choose a healthcare provider who offers quality healthcare services at reasonable prices. Going for those who provide services at premium prices will exhaust your insured sum faster.

• Negotiate on hospital bills

Since indemnity covers you up to the sum insured, you should negotiate your hospital bills to make more claims if needed in a year.

Conclusion

In totality, it is what you should know about indemnity health insurance. These plans are good compared to others in terms of your comprehensive coverage. Moreover, since these plans also come in multiple variants, like individual and family floaters, you can cover all your family members. Also, since the disease defines no upper limit, it is a good plan for those at a higher risk of a disease whose medication costs a lot.

Disclaimer The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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