Need for Indemnity Health Insurance Plan

      Understanding Indemnity Health Insurance

What is an indemnity plan?

When purchasing a health insurance policy, It is essential to select a suitable plan that meets your requirements and covers specific risks. There are two categories of health insurance: indemnity health insurance and lump-sum benefit health insurance. Indemnity health insurance covers your general hospitalisation expenses, while lump sum benefit health insurance provides predetermined coverage for specific diseases, as stated in the policy. 

What is an indemnity health insurance plan?

 Individual health insurance plans are also called mediclaim insurance plans or regular health insurance. Indemnity-based health insurance policies cover the expenses incurred during hospitalisation up to the total sum insured. This means the insurer will pay for the treatment costs within the coverage limit. Indemnity health insurance policies can be availed as regular plans for families, individuals, or seniors. 

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How does an indemnity health insurance plan work? 

As previously stated, these plans offer reimbursement for hospitalisation or medical treatment expenses up to the insured amount. For instance, if you have an indemnity-based health insurance policy with a sum insured of ₹5 lakhs and receive medical treatment that costs ₹2 lakh, your insurer will cover these expenses after deducting the non-payables as per the policy terms and conditions. You need to provide the necessary medical documents and bills.

The remaining ₹3 lakh can be utilised for any additional medical expenses during the policy period. Any copay or aggregate deductible applicable to the policy will be deducted from the admissible amount, which has to be borne by the Insured,
 

Why should you buy an indemnity health insurance plan? 

To manage increasing healthcare expenses. Mediclaim policy is a safe and secure option to mitigate healthcare expenses. This is where indemnity health insurance comes to your rescue. 

Healthcare costs in India are rising by 8 to 10% every year. If you require a complex surgery, it can cost a significant amount of money. By having an indemnity plan, you can manage these medical expenses more effectively. However, it’s important to note that it doesn’t cover deductibles and other non-payables, as mentioned in the policy.

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Benefits of buying an indemnity health insurance plan  

Many people nowadays opt for fixed-benefit health insurance plans over Indemnity health insurance plans. Since this type of health insurance plan comes with its own set of benefits, such as:

1) Flexibility in choosing hospitals 

Typically, insurance companies that offer indemnity health coverage have well-established partnerships with a vast network of hospitals and medical practitioners. This means that policyholders can choose the hospital or doctor they prefer for treatment. Additionally, the availability of a cashless facility ensures that insured individuals do not have to worry about submitting bills, as the empanelled hospital takes care of it. 

2) Ability to make multiple claims 

Indemnity in health insurance refers to a type of plan that reimburses you for actual medical expenses incurred for treatment, up to a specified limit. Additionally, it often allows for multiple claims to be made up to the sum insured limit, unlike fixed-benefit plans that cover only once per disease. The ability to file multiple claims is a valuable feature of this policy.

3) Affordable premiums 

Health insurance policies can be expensive, and the premium cost is an essential factor to consider. Many indemnity health plans require a deductible, where the policyholder shares a percentage of the treatment cost with the insurance provider. This arrangement helps reduce the risk for the insurance company. 

4) Wide range of protective coverage

 One notable advantage of indemnity-based plans compared to defined benefit plans is their comprehensive coverage for a wide range of medical treatments and diseases. An indemnity-based medical policy covers the actual hospital bill amount up to the maximum sum insured limit. Therefore, the cost of treatment is not a cause for concern if the insured individual has opted for an adequate coverage amount. An indemnity insurance plan is the best option if you want a health insurance plan offering excellent medical coverage. It provides extensive protection against various illnesses and covers most hospitalisation expenses. It also allows you to benefit from cashless claims.

In a Nutshell

Insurance companies in India offer a wide range of Indemnity policies in health insurance plans catering to the diverse needs of different individuals. If you seek adequate coverage against the majority of ailments and hospitalisation charges at an affordable premium, then this plan is what you should opt for