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3 Types of Health Insurance Plans You Should Know About

Published On Jan 29, 2021, Updated On Apr 26, 2021

When you decide to invest in a health insurance , there are usually a host of options to choose from whose terms and benefits might be equally lucrative but have contradictory terms and underlying conditions. In this article, we are going to talk about 3 types of health insurance plans that you need to know about so that you are able to choose the best option suited to your financial and medical requirements.

The following list is about the 3 different kinds of health insurance plans that you need to know about -

1. Indemnity Health Insurance Plan

An indemnity health insurance plan offers you protection against medical emergencies. It also covers your hospitalization charges and offers you a sum assured at the end of the policy tenure. Under this option, the sum insured is mutually decided by you and the Health insurance company at the beginning of the policy and it remains the same throughout the term of the plan.

Indemnity health insurance plans come with an individual cover option as well as a family floater option, thereby securing both you and your family’s unforeseen medical and financial expenses. Indemnity health insurance policies also offer the flexibility of choosing any hospital or medical center based on their preferences, since most indemnity policies have a tie-up with several such healthcare centers. It ensures that the medical attention that you receive is uncompromising and undisturbed. However, you need to be aware of a few features that come with it before investing in one, as follows -

2. Deductibles

A deductible is the amount of money that you have to pay by yourself for health services before your policy comes into force. For example, if your health insurance policy has a deductible amount of INR 20,000, and you file an insurance claim of INR 35,000, then you would have to pay the deductible amount yourself and the insurance company will only pay the claim if it is greater than the deductible amount.

3. Co-Payment

When you are buying health insurance, you must bear in mind that not all expenses would be borne by the insurance company. While filing a health claim, a fraction of the payment has to be paid by you. This is known as co-payment where a certain percentage of the claim made towards the health insurance company is borne by the policyholder themselves.

Example -

Let us assume that Mr. Verma has coverage or sum insured of INR 10 Lakhs and undergoes a surgery that costs him INR 50,000. Depending upon the deductible amount of his insurance policy, Mr. Verma will either get a reimbursement of his surgery cost or a percentage of the total cost incurred by him. The sum insured will remain intact and will be payable to him at a later date or at the end of the plan’s tenure, according to the clauses of the company or any claim filed by him.

4. Fixed Benefit Health Insurance Plan

A fixed benefit health insurance policy is one where you are promised a fixed sum of coverage for diagnosis and treatment costs for any pre-existing medical condition that you have. It offers support for a wide range of unforeseen medical emergencies such as a critical illness cover, an accident cover, and a cashless claim benefit. It also covers pre and post-hospitalization charges that are not always offered by other health insurance plans. Under this option, you have the flexibility of choosing the coverage that is best suited to your financial demands and it is often a helpful and positive remunerative addition to your existing health insurance policies if any.

5. Top Up Health Insurance Plan

A top-up health insurance policy is an additional financial cover that you choose along with your existing insurance plans. It is a kind of a contingency sum that you can access in case your medical expenses exceed the amount of sum insured in any other policy. It allows you to extend your spending capacity and financial threshold during a medical emergency. While the coverage offered by top-up plans varies from one insurance company to the other, it includes some basic coverage options such as pre and posts hospitalization charges and daycare medical services. You must not confuse the benefits of a top-up health insurance plan with that of a rider. Riders can be purchased only from the insurance policy they are associated with, whereas you can buy a top-up health insurance policy irrespective of a separate health policy.

What makes a top-up health insurance policy your best friend during times of medical emergencies is the option of filing a health claim for both your top-up and individual health insurance policy from different insurance companies at the same time, who are bound to pay the amount of money promised to you.

These are the 3 different kinds of health insurance policies that are offered by most health insurance companies. Each of them comes with different benefits and clauses and is designed to assist you during times of medical emergencies, whether pre-existing or unforeseen. Being aware of these variations, you can choose your health insurance plan according to your affordability and coverage requirements.

Also, Read

Does Your Existing Health Insurance Policy Cover Coronavirus (COVID-19) Disease?

IRDAI Directs Health Insurers to Decide COVID-19 Claims within Two Hours

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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