Articles November 16, 2020

Which One to Choose for COVID Cover – Fixed Benefit vs Indemnity Health Plan?

Your health insurance helps pay the expenses for hospitalization. And as there are numerous cases of COVID now in India, having health insurance becomes a necessity. To get quality medical treatment for COVID, you must have compared different health insurance plans. But still, there is another point which you should take into account for COVID cover to make a good decision. Because you should understand the type of health plans such as a Fixed benefit plan, which can provide extra funds to your existing plan. They are different from indemnity plans that offer many other benefits. So read this post and have a clear understanding of the Fixed Benefit & Indemnity Health Plan, before choosing out of them for the COVID cover.

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Fixed Benefit Plan

As per the plan name, fixed benefit plans provide you a fixed amount of sum insured when the insured person raises a claim for COVID. The claim amount will be paid in a lump sum irrespective of the actual or estimated medical expenses. This insurance plan acts as an additional source of money. Following are its associated benefits:

  1. Covers Personal Accidents
  2. No sub-limits on COVID coverage
  3. The Claim Amount enables you to meet various minor or major non-medical expenses

Indemnity Plan

An Indemnity plan offers complete COVID cover to the insured, up to the sum insured, for the expenses incurred due to medical treatment. Your medical expenses will be reimbursed when a claim is raised. However, unlike fixed benefit plans, the indemnity will offer reimbursement only for the actual or estimated medical expenses. In an indemnity plan, you will get the feature of deductible, which is a specified amount the insured must pay before claiming. The common example of an indemnity plan is a regular health insurance and family floater policies for COVID. Following are its associated benefits:

  1. You can get comprehensive coverage for a wide range of expenses including surgeries
  2. You can make multiple claims within the policy year until the sum insured is exhausted
  3. You can also opt for policy renewal
  4. A cashless hospitalization facility will be available to the policyholder when he/she gets treatment at any of the network hospitals
  5. Between fixed benefit & indemnity health plan, the indemnity is likely to have a lower premium

Choice Between Fixed Benefit and Indemnity Health Plan

After knowing about both the fixed benefit & indemnity plan, you should start planning to buy a health cover for COVID. As the aim of a health plan is to minimize the burden of hospitalization costs, an indemnity plan fits the bill. But if you want to increase the cover, you can choose a fixed benefit plan.

You should also take care of the fixed benefit plan, high premiums as the increased cover remains no longer valid once the claim is paid to the insured. So, for your COVID Cover, an indemnity plan is a wise decision.

Let’s know how the indemnity plan is useful for your family’s well-being –

For example, a policyholder buys an indemnity health insurance plan with a sum insured of INR 5 lakh. Now, if he gets operated for a COVID, it would cost him INR 2 lakh, so the insurance company will pay the cost, post bill submission, for the actual expenses that have been incurred. And the plan’s remaining amount will continue to be left unutilized for future medical needs.

  1. Indemnity Plan provides flexibility to choose hospitals. This means the policyholder can choose the desired hospital or health care professional for COVID treatment.
  2. The availability of cashless claim in indemnity health plans makes bill payment easier
  3. Unlike the fixed benefit plan, the indemnity health plan covers a wide range of treatments and illnesses including COVID.
  4. You must think of insurance as an unwanted expense as the premium payment plays a major role. But in an indemnity health plan, you will get a deductible where the policyholder shares the percentage of the overall cost of medical expenses with the company. As a result of which, the insurance company’s at a lower risk, which results in a lower premium.

Now when it comes to choosing from a fixed benefit & indemnity health plan, you must consider the above-mentioned factors. If you need a lump sum payment for COVID treatment, a fixed health plan is a better option for you. However, if you are looking for a health insurance plan for COVID that offers optimum protection, covers the majority of ailments and  caters to hospitalization charges at a budget-friendly premium, an indemnity health insurance plan will be suitable for you.

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