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What is an Indemnity Health Insurance Plan?

How Do Indemnity Plans Work?

What Are the Benefits of Indemnity Health Plans?

What Are the Drawbacks of an Indemnity Health Policy?

What are Fixed Benefit Health Insurance Plans?

Difference Between Indemnity & Fixed Benefit Plans


Indemnity Plan

Fixed Benefit Plan

What is it?

The insurer will reimburse you for medical expenses incurred for hospitalization or other treatments, (up to the SI).

Upon diagnosis of a critical illness or certain medical conditions, the insurer will make a lump sum payment (of the entire SI).

What is covered?

It offers coverage for several diseases, medical conditions, and treatments

These plans are limited to specific critical illnesses and conditions.

What can it be used for?

The compensation will only cover your hospital bills, and some expenses will not be covered, for example, post-hospitalization expenses.

You can use the compensation amount for any purpose, including post-hospitalization, medication, household expenses, children’s education, etc.

What is needed for a claim?

When you make a claim, you will need to submit all relevant hospital bills, medical documents, etc.

Fewer documents are required, usually just a diagnosis report from a registered medical professional.

How many times can you claim?

You can make multiple claims during the year until the entire sum insured is used.

When you make one claim, it usually uses the entire sum insured amount.

Do you have to pay anything?

The claim amount may be subject to deductibles, co-payment clauses, or sub-limits meaning you may have to pay some portion of the expenses on your own.

There are no deductibles or sub-limits included in the claim amount.

How much is the premium?

The premium is more cost-effective.

The premium is usually higher.

Are there any other benefits?

Insurers can tie up with network hospitals and offer cashless claims.

The benefit amount can be used to cover any expenses that are not covered by a regular health insurance plan.

So, when you are buying a health insurance plan, ensure that you get the one that provides optimum protection. In most cases, an indemnity-based plan will offer the most coverage as it covers more ailments, as well as hospitalization at a lower premium. However, if you already have some type of health cover, a fixed-benefit plan will offer additional financial protection.

Thus, look at your situation and your healthcare needs, as well as your and your family’s medical history, before you decide which one is best for you.

Frequently asked questions