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Understanding Fixed Benefit & Indemnity Based Health Insurance

Published On Jan 10, 2020, Updated On Feb 15, 2021

Are you planning to invest in health insurance? 

Are you about to start looking for one of the best health insurance policies? 

If willing to buy the best health insurance to get all your specific medical needs met, learn that it would be important for you to learn the two health insurance policy types in the first place. 

To make the ideal decision, it would be significant for you to distinguish between fixed benefit health insurance and indemnity based health insurance. 

Fixed Benefit Health Insurance – What Is It?

Fixed benefit health insurance is a health insurance type in which the sum insured amount to be paid out is fixed. Under a fixed benefit plan, a lump sum amount is paid to the insured individual, despite the actual or intended medical expenses incurred during the hospitalization. It is up to the policyholder on how they want to make use of the claim amount. 

Note that in case of fixed benefit health insurance, the sum insured paid is to cover expenses for a pre-determined illness or condition that has been insured. Fixed benefit plans do not provide coverage for regular hospitalization expenses incurred by the insured. 

  • Why should I buy fixed benefit health insurance?

Like unnumbered people across the country, you can purchase fixed benefit plan to cover a wide array of services, such as critical illness cover, personal accident cover, hospital cash policy, and more. Fixed benefit plans help one get rid of sub-limits. What’s best is that these plans also prove to be helpful in catering to non-medical expenses that occur due to loss of income or livelihood during the treatment or recovery period. Since making apt use of lump sum amount received is totally dependent on the insured, the amount received can be used to take care of expenses such as household expenses, frequent travel, educational expenses of kids, and much more. 

Indemnity Based Health Insurance – What Is It?

Indemnity based health insurance is a health insurance type which takes care of the hospitalization expenses and under which the cost of medical expenses is reimbursed to the policyholder. However, the amount reimbursed is only up to the total sum insured. In other words, indemnity based health insurance will pay only the money spent on the treatment within the limits of sum insured. 

If the insured individual has opted for cashless hospitalization, they only need to pay a certain fixed amount as indemnity plans come with the feature of deductibles. While if the insured has not opted for cashless hospitalization, they are required to submit the necessary bills paid, medical reports, and other documents on the basis of which the insurance company reimburses the expenses. Lastly, the regular individual health insurance plans and family floater plans come under the category of indemnity plans. 

  • Why should I buy indemnity based health insurance? 

The ideal reason to buy indemnity based plans is to gain coverage for a wide array of treatment and illnesses apart from getting the actual hospital bill amount covered. If you have been looking for a comprehensive health insurance cover, opting for indemnity based health insurance would be the better choice to make. Availing the best possible treatment without worrying about the finances would require you to just visit the partner hospital or medical center. 

Which one to choose between fixed benefit health insurance and indemnity based health insurance? 

It is quite clear both the health insurance types comer with their own advantages. If you want to make the best investment, analyse your specific health insurance needs in the first place. 

If you possess a high risk for specific ailments running in the family, it would be best to go with a fixed benefit plan along with an indemnity based plan to gain a wide coverage. In a case like such, your fixed benefit plan will cover you for expenses that your basic indemnity plan does not. 

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Now that the concept of fixed benefit plans and indemnity based plans is clear to you, make sure you choose the best one. Many policyholders opt for doubling both the policies to make the most of both. You too can choose the same. If not, it is advisable to make a decision only after emphasising your specific health insurance needs carefully. 

To gain detailed information about fixed benefit health insurance as well as indemnity based health insurance, you can also initiate contact with InsuranceDekho experts at 18001205698. 

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