INDEMNITY HEALTH INSURANCE PLANS - HIGHLIGHTS & LIMITATIONS

 

health insurance

Introduction

Health insurance played a very crucial role in Mr. and Mrs. Sinha’s lives. Here is the true story of a senior citizen couple. Mr. Sinha is a retired person from one of the Maharatna Companies of the country's Central Public Sector Enterprises. Post-retirement, Mr. Sinha has a health insurance policy from his employer and he kept paying the premiums for it for the next few years post-retirement. But later on, he stopped paying premiums as he assumed that it was a waste of money since he had not encountered any medical emergencies until now. And the policy lapsed. Mr. Sinha was not in favor of reviving the policy, but his daughter continuously insisted to revive it, as she was an insurance professional and she knew the importance of health insurance at this age for them. Mr. Sinha revived his health insurance policy, which soon became a blessing for him when his wife got admitted to the ICU for a month during the COVID-19 pandemic. The sudden medical emergency did not put a dent in Mr. Sinha’s savings during the post-retirement phase, as their health insurance policy took care of the entire medical expenses during the entire hospitalization and treatment phase, including ICU expenses. This is how crucial health insurance is to every individual’s life. Insurance is a crucial investment for everyone to secure their financial future and the future of their family. Health insurance has become very popular over the years, but life insurance and term insurance are still the two most popular types of insurance in India. The necessity of having a quality health insurance plan has been highlighted by the recent pandemic.

There are many types of health insurance plans available from multiple insurers. One of the most common types of health insurance is indemnity plans. Let us see some of the details of indemnity plans and their target audience.

Indemnity-Based Health Insurance Plans

Protection against any financial loss is the core meaning of the word indemnity. The same theory underlies indemnity plans. With this type of health insurance, the insured person's actual hospitalization costs are covered. Policyholders have the option for cashless hospitalization. In such circumstances, they won't be required to pay anything (or a minimal fixed amount in accordance with the insurer's policy terms) at the time of hospital admission. If the policyholder does not opt for cashless hospitalization, then they will have to submit all the necessary documents, like medical reports, hospital bills, etc., the compensation for the actual expenses will be based on such documents.

Features of health insurance policies based on indemnity

Basic health insurance is offered to policyholders through indemnity plans. Indemnity-based plans make up the majority of the medical or health insurance options currently on the market.

Some of the highlights of these plans are mentioned below:

Reduced premiums

In comparison to other kinds of health insurance policies, the premiums for indemnity plans are lower. Most indemnity plans require the insurer to cover the remaining balance while the policyholder bears a portion of the risk or treatment costs. As a result, the insurer faces less risk, which lowers the cost of the premium.

Cheaper hospitalization

In our country and everywhere else, healthcare costs are constantly rising. The COVID-19 pandemic, in which many individuals could not afford to receive competent medical care in private institutions, has further brought this into focus. In such circumstances, health insurance might be a boon to people to meet unexpected medical and healthcare costs. By lowering the cost of private hospitalization, it improves access to high-quality private hospitals.

Availability of both family floaters and individual plans

Indemnity plans are offered for both individuals and entire families. Individual policies must be purchased in the insured person's name. On the other hand, family floater plans can be used to offer health insurance coverage for the entire family, and the premium cost will be higher than individual plans after taking in many things like the number of people to be insured, the plan's maximum age limit, etc.

Flexible options

The flexibility to select the hospital or doctor of your choice for receiving medical assistance is a key advantage of indemnity insurance. Due to this flexibility, the insured individual and any of their family members who are covered by the plan will receive timely medical care without undue delay.

Exclusion

Like any other health plan, there are certain specific exclusions where the insurer is not liable to settle the claims raised. If the insured person or any other person covered under the plan has a specific medical condition, then the claim will not be settled.  

Who should go in for indemnity plans?

Health insurance is important for every person and their family members. An indemnity plan helps in getting compensation for the cost of hospitalization without any pre- or post-hospitalization expenses. These plans are a good option for people looking for coverage of maximum ailments and illnesses, as well as hospitalization expenses, at lower premiums. These plans also provide huge flexibility in choosing hospitals and doctors to get medical attention. Hence, it can also be useful for people looking for greater flexibility in their health insurance plans.

Conclusion

In today's world, having a good health insurance plan is essential. However, the majority of people in India still do not have a reliable health insurance plan. Even if more people are choosing health insurance plans, there is still much to be done to raise awareness of the importance of health insurance and its advantages. In these situations, indemnity plans can be utilized to protect against the high expense of healthcare in our nation and to cover pre-existing conditions.

Location: Mumbai, Maharashtra, India

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