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Should You Buy an Indemnity Health Insurance Plan in India?
Health insurance is the need for the hour today. Whether you buy a fixed benefit plan like critical illness insurance or an indemnity health plan like mediclaim insurance, it supports you during medical exigencies. However, many people nowadays opt for fixed-benefit health insurance plans over indemnity-based policies. Since indemnity-based mediclaim policies have their own set of benefits, know why you should consider buying one.
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- Should You Buy an Indemnity Health Insurance Plan?
What are Indemnity Health Insurance Plans?
Indemnity health insurance plans are mediclaim insurance policies in which the insurer pays the actual hospitalization expenses incurred by the policyholder up to the sum insured limit. It means that the insurer will reimburse the incurred treatment cost unless the sum insured amount is exhausted. You can raise multiple claims in a year under this health insurance policy until your coverage amount is over.
For example, Mr. Prakash has a health policy with a sum insured of ₹10 lakh. He undergoes treatment in a hospital, and the total cost is ₹5 lakh. In this case, the insurer will pay only ₹5 lakh for the treatment as per the policy clauses. The remaining ₹5 lakh can be used for other hospitalizations during the policy term.
Some examples of indemnity health insurance plans are family health insurance plans, individual health plans, health insurance for senior citizens, and COVID-19 health plans.
Benefits of Indemnity Health Insurance Plans
Check out some of the key benefits of buying indemnity health insurance plans:
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Ability to File Multiple Claims
An indemnity-based policy allows you to raise multiple health insurance claims in a policy year. You can file an unlimited number of claims in a year unless your sum insured amount is not exhausted. The same is not possible under a fixed benefit-based policy.
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Flexibility to Choose Hospitals
All health insurance companies providing indemnity health coverage offer cashless treatment at all hospitals across India. It implies that you are free to choose your desired hospital or the doctor for treatment. The availability of a cashless facility also means that you do not have to worry about paying the bill, as it is taken care of by your insurance company.
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Wide Range of Coverage
One of the noticeable benefits of indemnity health insurance plans is coverage for a wide range of medical treatments and diseases, including COVID-19. Unlike fixed benefit plans, an indemnity-based medical policy is not limited to providing coverage for listed illnesses only. Instead, it covers the actual medical expenses, including room rent, ambulance expenses, pre-post hospitalization expenses, surgical expenses, ICU charges, etc., up to the sum insured limit. So, the cost of treatment is not a matter of concern if you have opted for an adequate coverage amount.
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Lower Premiums
Indemnity health insurance plans have lower premiums than fixed-benefit plans. Most of the indemnity health plans come with a deductible that you have to pay at the claim as part of the treatment cost. Only when you have paid the deductible amount, your insurance provider will pay the remaining claim amount. As a result, it reduces the risk for the insurance company and, thus, attracts lower premiums.
Differences Between Indemnity Health Insurance and Fixed Benefit Plans
Take a look at the differences between an indemnity health insurance plan and a fixed benefit plan:
| Categories | Indemnity Health Insurance Plans | Fixed Benefit Health Insurance Plans |
| Meaning | It reimburses your actual medical expenses up to the sum insured limit. | It pays the entire sum insured on the diagnosis of the disease or in case of hospitalization. |
| Coverage | Wide range of medical coverage, including in-patient expenses, ICU charges, | Coverage for listed diseases or treatments only |
| Premiums | Premiums are lower than fixed benefit plans | Premiums are higher than indemnity-based plans |
| Number of Claims | You can raise multiple claims in a year until your sum insured amount is exhausted. | Only a single claim can be raised. |
| Suitable For | If you want complete health coverage for planned or unplanned medical expenses. | If you have a family history of a major illness or need a lump sum payment for medical treatment. |
In a Nutshell
Health insurance companies in India offer a variety of indemnity-based plans catering to the health needs of different individuals. If you want comprehensive coverage against the majority of ailments and hospitalization charges at an affordable premium, then an indemnity health insurance plan is what you should opt for. Ideally, for an all-inclusive health cover, both indemnity and fixed benefit mediclaim plans can be purchased.
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Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in
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*Product information is authentic and solely based on the information received from the Insurer. Policybazaar is acting only as a facilitator and claims settlement shall be at the sole discretion of the Insurer. Policybazaar does not provide any medical or surgical advice or diagnosis and is not responsible for your interactions / treatment by a medical practitioner/hospital. Please consult a registered medical practitioner for any medical or surgical advice. The Information that you obtain or receive from Policybazaar, and its employees, or otherwise on the Website is for informational purposes only. As per the Insurance guidelines, you are allowed to cancel the policy with-in 30 days from the date of Issuance of policy.This option is available incase of policies with a term of one year or more.
*All the health insurance plans cover hospitalization expenses including COVID-19 treatment cover up to the specified limits. You can also buy specific COVID-19 health insurance policies such as Corona Kavach Policy and Corona Rakshak policy.
**All savings and online discounts are provided by insurers as per IRDAI approved insurance plans. #Tax Benefits are subject to changes in tax laws. GST Exemptions depend on fulfilment of qualification criteria and submission of relevant documents.
*₹1748/month is the starting price for a 1 crore health insurance for an 18-year-old male, with no pre-existing diseases. Discount on renewal premium is subject to the number of wellness points earned in the health insurance policy. For more details about the plans, please read the sale brochure carefully to get upto 100% discount on renewal premium.
*₹400/month is the starting price for ₹ 5 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases
*₹541/month is the starting price for ₹ 10 lakh Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases
*₹762/month is the starting price for ₹ 1 Crore Health insurance for a 30 year old male & 29 years old female, living in Delhi with no pre-existing diseases
*₹243/month(₹ 8/day) is the starting price for a 5 lakh health insurance for a 20-year-old male, non-smoker, living in Bengaluru with no pre-existing diseases
*₹2020/month is the starting price for ₹ 1 Cr Health insurance for a 50 year old male & 50 years old female, living in Bangalore with no pre-existing diseases rounded off to nearest 10.
*₹390/month (₹13 per day) is starting price for 1 cr. Health insurance for 25 years old male, with pre-existing diseases, residing from tier 1 city rounded off to the nearest 10.
*No medical tests are required unless requested by the insurer’s underwriter. In-case of pre-existing diseases relevant medical proof would be required as per the terms and condition of the policy opted.
*The values taken for effective cost calculation are indicative values and may change as per the selected plan.
*Coverage upto double the amount of Sum Insured is available on certain covers for a minimum plan of Rs. 5 Lakh on the first claim only to an individual of upto 45 years of age with no pre-existing diseases. The benefit is available with or without extra cost depending on the plan chosen.
*Coverage of pre-existing diseases is provided by insurer as per their underwriting policy.
*The scope of coverage may vary from plan to plan.
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