Fixed Benefit Plans-Guide
Fixed benefits are those monetary payments delivered to the concerned beneficiary of a particular insurance plan on a fixed schedule and a fixed amount. This implies that the payable amount is already determined and pre-fixed, and it is not liable to change under any circumstances.
A fixed benefit health insurance is that type of health insurance where the insured sum for payout remains fixed.
Explanation of Fixed Benefit Plan
Several life insurance companies offer various plans with different kinds of fixed benefits in the form of financial planning. In the case of a fixed benefit plan, the paid insured sum covers the expenses of a predetermined illness or any particular health condition that has been insured. It does not cover regular hospitalization costs that the insured may require.
Understanding Fixed Benefit Plan
You can easily purchase a fixed benefit plan for covering a host of services including critical illness coverage, personal accidental coverage, hospital cash policy and several others. This sort of policy also helps you to get rid of any sub-limits. Moreover, they even cater to cover the non-medical expenses incurred due to loss of livelihood or income to fulfil the treatment costs. The lump-sum amount received from this plan is targeted to cover medical expenses, however, it can also fulfil other important and expensive targets like education, travel, household expenses, etc. It does not cover hospitalisation coverages and offers a certain lump-sum payment to the policyholder.
This particular pre-defined payment does not depend on the treatment expenses. It requires the certified diagnosis report of the medical condition, approved by a registered doctor to settle the claims. You can utilize the claim amount at your convenience.
Most Common Fixed Benefit Health Insurance Plans would be:
- Critical Illness Plans, wherein the entire sum insured would be paid to the policyholder as soon as the insured is diagnosed with any of the listed critical illnesses irrespective of the amount spent on treatment
- Personal Accident Plans, wherein the entire sum insured or a specific part of the sum insured would be paid for any damage due to the accident such as:
- Loss of 2 limbs- 100% of the sum insured would be paid
- Loss of 1 limb- 50% of the sum insured would be paid
- Loss of both eyes- 100% of the sum insured would be paid, etc.
Advantages of Fixed Benefit Plan
- Comes in handy for personal accidental coverage
- devoid of any sub-limits while getting cover for certain specific medical conditions
- The lump-sum amount received by the insured can be utilised to meet other vital requirements
- Hikes up the cash flow
- Helps address the medical issues sooner
- May serve as compensation to cover for the income or livelihood loss because of the concerned health condition of the insured
- Post-hospitalisation costs can be met comfortably
- Simple and easy documentation
- Allows tax exemptions
- Noted for resourcefulness
- There are several kinds of policies like Daily Hospital Cash Policy, Personal Accident Policy And Critical Illness Policy
A fixed benefit plan is particularly helpful if you are prone to certain types of health ailments because of your heredity, family history, lifestyle, etc. This is because, when you are diagnosed with any such type of illness, the insurance company will typically pay you a lump sum upfront, without any proof of the estimated or actual medical treatment costs. Only a diagnosis report will suffice the needs.
As the lump sum paid does not depend on the actual medical costs incurred, so there is no question of any sub-limit. You are advised to choose such a fixed benefit plan that covers a wide range of critical illnesses.
Disadvantages of Fixed benefit plan
- Eligibility is limited to certain particular kinds of ailments
- The premiums for these kinds of plans are comparatively more expensive than indemnity health insurance plans
This is a comprehensive guide about fixed benefit plans. It is almost an indispensable part of securing your health. It is ideal for those who are more prone to carry health risks of certain types of ailments. It is best to research carefully and choose fixed benefit insurance that covers a large number of illnesses. To be able to cope up with the rocketing medical costs, a comfortable and well-planned financial portfolio has become indispensable. A fixed benefit plan allows you to enjoy additional coverage and plan your budget accordingly. As non-medical expenses are also included, it comes as a great blessing during such crises periods.