What is Fixed Benefit and Indemnity-Based Health Insurance Plans?

Posted on: Jun 28, 2022 | | Written by:

What is Fixed Benefit and Indemnity-Based Health Insurance Plans?

Fixed Benefit & Indemnity-based Health Insurance

There is a lot more awareness about health and wellness in our country than a few years back. However, this knowledge about health conditions is nothing without a suitable health insurance plan.

Also, sometimes people get overwhelmed sue to the jargons used by insurance company. Therefore, here’s a basic guide to understandthe concepts of fixed benefit medical insurance and indemnity health insurance plans.

What is fixed benefit health insurance plan?

A fixed benefit health insurance plan includes coverage for a pre-defined event that is insured. The plan gives a guaranteed and fixed amount to its insurer if he/she experiences an insured event as mentioned in the policy terms. The insured condition can be medical conditions or critical illnesses such as cardiovascular diseases, kidney functioning issues, and cancer, among others.

Additionally, a fixed benefit health insurance plan offers a lump sum amount to the insured as a claim, regardless of the actual or intended expenses that he/she incurred during hospitalization. Therefore, the utilization of the claim amount is completely the choice of the policyholder.

What is indemnity-based health insurance plan?

As the name suggests, an indemnity medical insurance plan compensates its policyholder against hospitalization expenses. This plan reimburses the expenses incurred by the insured during hospitalization. But the reimbursement is only up to the total sum insured. These plans come with an array of policies, such as Critical Illness Policy, Daily Hospital Cash Policy, and Personal Accident Policy. As a result, they cater to a variety of medical needs. Moreover, if an insured opts for a cashless hospitalization plan, he/she requires paying only a certain fixed amount, and the insurer takes care of the rest. However, if this individual does not have a cashless hospitalization plan, he would need to submit all receipts and bills to the insurer. Based on these documents, the insurance provider will reimburse the insured person.

Fixed benefit and indemnity-based health plans – A comparison

Features	Fixed Benefit Health Plan	Indemnity-Based Health Plan
Function	Provides the sum insured for pre-determined medical conditions or critical illnesses.	Provides reimbursement to an individual for the money spent in medical treatment up to the sum insured.
Pre-requisites	A policyholder has to be diagnosed with a pre-determined medical condition as per the policy terms. To claim the insured amount; one must provide a diagnosis report by a certified doctor.	This requires the insured to be hospitalized or undergo medical treatment (day-care procedure or diagnostic tests).For making a claim, a policyholder must provide all hospital bills detailing every expense to the insurer or insurance company.
Restrictions of the plan	A fixed benefit health plan is limited to specific illnesses or ailments. Also, premiums for these plans tend to be more expensive than indemnity-based health plans.	This plan has particular items in the expenses list whose cost it shall not bear, like gauze, glove, oxygen mask, etc. Therefore, a policyholder must pay for these items in the event of hospitalization.

Conclusion

It is very important that due research is done before buying anyhealth insurance plan. There are manyhealth insurance plans that are available, but the best one is the one that fulfills all your healthcare and financial needs.

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

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