What is Health Insurance Indemnity Plan? Working and Benefits

Also known as Mediclaim, indemnity health insurance plans provide the policyholder with the flexibility to choose their healthcare companies and compensate them for the expenses incurred. In this article, we will understand more about health insurance indemnity plans, their benefits, types, and coverages. We will also learn about the factors that must be considered while choosing an indemnity health insurance plan. 

What is Indemnity Medical Insurance?

Indemnity medical insurance is a type of health insurance plan in which the policyholder is provided the actual medical expense in case of hospitalisation. The policyholders can claim the whole amount up to the limit of sum insured in the policy as per the terms and conditions. Also, the policyholder has a choice to opt for any network hospital where the policy provider has a tie-up. 

This is different from a fixed-benefit health insurance plan, where the policyholder fixes an amount that is given to you when you claim your policy.

How Does Indemnity Medical Insurance Work?

Indemnity in insurance means that the policy provider will compensate the expenses to the policyholder in times of medical emergencies, particularly hospitalisation. Therefore, if you are hospitalised for any reason, your hospital bills will be paid by policy providers, typically up to the limit of the sum insured. 

For example, if a person A has indemnity medical insurance of Rs 5 lakhs and he is hospitalised for 3 days due to some illness. The hospital bills were of Rs 2.5 lakhs. The policyholder can apply for cashless payment if the hospitalisation was planned or can reimburse it in case it was unplanned. The bill amount will be paid by the policy provider. The remaining Rs 2.5 lakhs can be used by the policyholder in the future if a need arises. Note that every insurance provider has some terms and conditions that are applied when you claim your policy amount. 

Benefits and Coverages in Indemnity Health Insurance

• The Indemnity health insurance plan offers you extensive coverage, including in-hospital expenses, ICU charges, room charges, pre- and post-hospitalisation expenses, surgical expenses, etc. 
• You can opt for cashless hospitalisation, where you won’t have to pay anything and the amount will be directly paid by your insurance provider.
• You are compensated for the whole amount up to the sum insured in your policy, unlike fixed insurance, where only a fixed amount is paid regardless of your actual expense.
• You get to choose from a vast network of hospitals as per your convenience. 
• Indemnity plans come with affordable premium options where you can opt for the best plan for you as per your needs and finances. 

Types of Indemnity Medical Insurance Plans

There are multiple indemnity medical insurance plans available in the market from which you can choose the most suitable one for you or your family. These are:  

1. Basic Medical Plans: These are affordable plans that cover your basic requirements, such as hospitalisation and surgeries.

2. Comprehensive Medical Plans: These plans have more coverage than basic plans and offer you add-ons like preventive care, OPD, daycare treatment, emergency ambulances, etc. 

3. Catastrophic Medical Plans: Designed for severe illnesses or injuries, these plans have higher deductibles but lower premiums and are suitable for major medical expenses.

Claim Process and Eligibility Criteria

You can claim your insurance both online and offline.  

• Collect all your bills from the healthcare provider.
• Fill out the claim form.
• Submit the required documents.
• After reviewing your claim request, your insurance provider will reimburse you the amount.  

Although the eligibility criteria differ for different insurance providers, for most adults, the minimum and maximum entry age is 18 years to 65 years. You may have to undergo a health screening test before buying a policy. If you have any pre-existing disease, then for some of the policies this may affect your eligibility. 

How To Choose The Right Indemnity Medical Plan?

• Understand Your Needs: Assess your healthcare needs and ensure the plan covers essential services.
• Provider Flexibility: Confirm the plan allows access to your preferred doctors and hospitals.
• Premium Cost: Evaluate premiums, deductibles, co-payments, and out-of-pocket maximums.
• Reimbursement Rates: Check the percentage of medical expenses reimbursed by the insurer.
• Exclusions: Review the policy for any excluded services or treatments.
• Customer Service: Consider the insurer's reputation for customer service and claim processing efficiency.

Conclusion

Most of the health insurance plans in India are Indemnity medical plans. They offer you flexibility, better coverage, and the freedom to choose your healthcare provider. There are also a wide range of options available from which you can choose the most affordable ones for you. Health emergencies can happen to anyone; having the right medical insurance plan can help you and your family avoid any financial stress in an already stressful situation. It is always advisable that you know about your policy in detail before you buy a health insurance plan for you or your family. 

FAQs 

Ques 1. Difference in indemnity and fixed-benefit health insurance plans?

Ans. In an indemnity plan, you are compensated for the whole expense up to the sum insured by your plan, whereas in a fixed benefit policy, you are paid a certain fixed amount only. 

Ques 2: Can I apply for cashless hospitalisation in an indemnity health plan?

Ans. Yes, you can opt for cashless hospitalisation if your hospitalisation is planned and you have informed your policy provider in advance.

Ques 3: Do indemnity insurance plans require referrals for hospital visits?

Ans. No, referrals are not required in indemnity plans. You can choose your healthcare provider for the list of network hospitals provided by your insurance company.

Ques 4: What factors should I consider when choosing an indemnity medical plan? 

Ans. Consider coverage needs, flexibility options, premium costs, claim ratio, exclusions, etc. when choosing a medical plan.