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A Guide on Indemnity-based Health Insurance Policies

Health insurance is the best shield to safeguard you and your family against various ailments and unanticipated healthcare expenses. Without this policy, you will be immersed in hospital bills. These days, people are purchasing indemnity health insurance to protect their loved ones from hospital expenses and medical inflation. This plan is also known as a mediclaim policy.

What is Indemnity Insurance?

An indemnity policy is a particular health insurance plan that compensates for the cost of medical expenses to policyholders. Indemnity plans usually reimburse the policyholder with the expenses incurred during hospitalization stay up to the sum insured under the insurance policy plan. For example, if you purchased a policy of Rs. 4 lakh (the sum insured amount) and are given a hospitalization bill of Rs.1.5 lakh, your insurance company will pay you Rs.1.5 lakh. The remaining amount can be utilized for a future claim during the policy tenure.

The medical indemnity insurance can be either a regular or comprehensive health insurance policy for individuals, family and senior citizens.

Benefits of Indemnity-based Health Insurance Plans

A wide range of coverage

These plans reimburse medical expenses within the maximum sum insured amount. Indemnity plans offer coverage for pre-hospitalization costs, in-patient expenditures like doctor’s consultation fees, ICU, room rent, diagnostic tests, surgery, medications, along post-hospitalization costs and daycare treatment expenses. These plans also compensate for the treatment of COVID-19. If you purchased a new indemnity health plan, you would be eligible for the COVID-19 treatment once the initial waiting period (30 days) is finished. If you have an existing policy, you will be paid off for the COVID-19 hospitalization at any time.

Some deductions (the cost of consumables such as PPE kit) are applicable when you raise a claim. However, the rest is paid to the insured policyholder.

If there is no availability of hospital beds or you can’t be shifted to the hospital for your treatment, your treatment costs will be covered under ‘domiciliary treatments’. Most indemnity health insurance plans offer domiciliary treatment coverage.

Cashless treatment

These days, many eminent health insurance companies are partnered with hospitals and other healthcare facilities. Indemnity health insurance plans embrace policyholders with two types of benefits. Firstly, the policyholder can choose his/her preferred hospital from the list and enjoy the best treatment facilities for his/her ailments. Secondly, at these networks or partnered hospitals, the policyholder can get cashless treatment facilities. This means your insurer will directly settle the bill with the hospital, and the policyholder doesn’t need to pay a single penny from his pocket. Before purchasing an indemnity health insurance plan, check the list of cashless facilities in your locality.

Co-payment

A co-payment refers to a specific part of the policyholder’s medical expenses, not the insurer, will pay in a health insurance policy. Most indemnity-based health insurance plans welcome policyholders with co-payment options. Your premiums will be lesser for higher co-pay options.

Let’s illustrate this with an example. Mr. Anish purchased an indemnity health insurance plan of Rs 5 lakh with a co-payment feature (Rs. 50,000). Mr. Anish got admitted due to a healthcare emergency. Once he was discharged, the hospital handed him an Rs. 5 lakh bill for his treatment. For this settlement, Mr. Anish will pay Rs. 50,000 and the remaining amount i.e., Rs. 4.5 lakh will be paid by his insurance company.

Sub-limit

These health plans offer a sub-limit on the room rent and other related expenses. If your selected room rent surpassed the sub-limit, there would be a proportionate deductible on your in-patient hospitalization claim. Thus, discard those indemnity health insurance plans that come up with sub-limits on room rent and other medical expenditures.

Indemnity Corona Kavach Health Insurance Plan

A standard indemnity health insurance plan covers all expenses related to the COVID-19. The policy coverage, terms, and conditions will be the same for all insurance companies.

  • The sum insured: Rs. 50,000 to Rs. 5 lakh (for self and other family members)
  • Age criteria: 1 day to 65 years
  • Policy terms: 3.5 months, 6.5 months, and 9.5 months

Corona Kavach Indemnity Insurance Plan

This ongoing deadly COVID-19 pandemic has forced everyone to purchase more indemnity corona kavach plans to stay protected against this lethal coronavirus. This plan covers the below-mentioned expenses if you are diagnosed with COVID-19.

  • In-patient hospitalization expenses, including the treatment costs, PPE kit, blood tests, ICU charges, oxygen cylinder, doctor’s consultation, and so on
  • The cost of comorbidity treatment during the COVID-19
  • Homecare treatment as recommended by the doctor
  • AYUSH treatment
  • Road ambulance costs

Drawbacks of Indemnity-Based Health Policies

  • Though indemnity health insurance plans offer hospitalization expenses, these plans still don’t cover many other expenses. These include post-operative costs and medicines expenses.
  • Indemnity plans come with a deductible. This means policyholders need to pay some expenses from their pockets.

Once you decide to purchase a health insurance plan, you should consider having an indemnity-based plan that covers all expenses related to hospitalization. Those who want to enhance their insurance coverage should choose a fixed-benefit plan. This type of plan compensates the policyholder for pre-decided illnesses up to the amount that is decided when purchasing the insurance plan.

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