Health insurance plans come in many forms. With the rising need for healthcare and the differing requirements of customers, companies now offer multiple plans in their lineup to ensure that all their needs are satisfied. When it comes to the benefits offered by health insurance, there are indemnity based plans and fixed benefit plans. While health insurance plans are available in different types, it is must be noted that these are not based on the choice of customers.
Most of the mediclaim plans available in the market are indemnity based plans that reimburse policyholders based on the medical expenses incurred. Here, the benefit is based on the actual medical expenses incurred. Fixed benefit plans, on the other hand, pay a fixed amount as compensation irrespective of the medical expenses. Fixed benefit plans are mostly limited to certain types of health insurance such as critical illness covers, personal accident covers, disease specific covers, etc.
Indemnity plans provide hospitalisation benefits up to the sum insured amount chosen by the policyholder. For instance, if you have a comprehensive health insurance plan for Rs.5 lakh and you incur medical expenses worth Rs.2.5 lakh for a surgery, the insurer will now reimburse the actual medical expense (Rs.2.5 lakh) to you upon submission of all relevant documents. Some of the key benefits of indemnity health insurance plans can be given as follows:
Though there are plenty of benefits that can be availed through indemnity based health insurance plans, they do come with certain limitations:
In fixed benefit plans, the full sum insured amount is paid to the policyholder upon the occurrence of an eventuality that may give rise to a claim. Regular health insurance plans are not offered as fixed benefit plans. Critical illness covers, personal accident covers, daily hospital cash coverage, etc. are the commonly available fixed benefit plans. Some of the major advantages of fixed benefit health insurance can be given as follows:
Despite the range of benefits offered by fixed benefit plans, there are certain limitations associated with these plans. Some of the common limitations here include:
Once you read through the benefits and limitations of these plans, you can understand that one type of cover is not the alternative to the other. It is better to have both to ensure that you are well protected from various hazards. A regular health insurance cover can help you with your medical expenses while a fixed benefit plan can help you take care of other expenses. Most of the indemnity based health plans offered by top insurers come with add-on covers that offer fixed benefits. Hence, it is very much possible to get benefits under the same policy. With adequate coverage of both types of health insurance plans, you can ensure financial security against various unpredictable medical expenses.
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