What are indemnity based health insurance policies?


A medical insurance plan is likely one of the strongest shields that one can have towards unplanned medical bills. Essentially the most generally purchased medical insurance plans are indemnity-based medical insurance plans and are additionally generally often known as mediclaim coverage.

Indemnity-based medical insurance insurance policies usually pay for the precise hospitalization bills incurred throughout the remedy as much as the coverage sum insured restrict. It signifies that the insurer pays you the remedy value inside the sum insured restrict as supplied beneath the coverage. The indemnity well being coverage could be a common or complete medical insurance coverage for people, household and senior residents.

Intensive protection

Because the title suggests, these plans operate on the precept of indemnity i.e. in case of medical bills incurred by a policyholder, the insurance coverage firm will reimburse these bills, topic to a most sum insured restrict. Ankit Agrawal, CEO and co-founder, InsuranceDekho mentioned, “These plans present protection for pre-hospitalisation bills, in-patient remedy together with physician’s charges, ICU, room costs, diagnostic assessments, surgical procedure, medicines, in addition to post-hospitalisation bills and daycare remedy. These plans additionally cowl the remedy value for covid-19 remedy. Nonetheless, these plans include a clause that requires hospitalisation of a minimum of 24 hours to be eligible for a declare.”

In addition to, there is perhaps some deductions for the price of consumables reminiscent of PPE equipment, if billed individually, on the time of declare. Nonetheless, the remaining quantity could be payable. “For brand new indemnity well being plans, covid remedy could be lined after an preliminary ready interval of 30 days. When you have an current coverage, covid hospitalisation could be lined at any time,” mentioned Dhirendra Mahyavanshi, co-Founder, Turtlemint, an insurtech agency.

Mahyavanshi additional mentioned, “In case of house hospitalisation, on account of non-availability of hospital beds or if you’re in no situation to be moved to the hospital, the price of remedies could be lined beneath ‘domiciliary remedies’ which is roofed beneath most well being plans.”

Cashless remedy

The insurance coverage firms normally have tie-ups with a number of hospitals and medical services. This gives two varieties of advantages to the policyholders of indemnity-based medical insurance plans. Firstly, they benefit from the flexibility to select from a number of hospitals and medical services which offer high quality remedy. Secondly, at these associate hospitals, one is eligible for availing a cashless remedy i.e. the medical invoice is straight settled by the insurance coverage supplier with the hospital and the policyholder needn’t pay something (besides co-payment share) from his pocket. An inventory of nearest hospitals with cashless services might be checked earlier than shopping for medical insurance.

Co-payment and sub-limits

In medical insurance, co-payment refers back to the portion of the medical invoice that’s agreed to be paid by the policyholder and never the insurance coverage supplier. It may be given as a hard and fast quantity or a hard and fast proportion of the remedy expense. “A lot of the indemnity-based medical insurance plans include a co-payment possibility. Plans with greater co-pay parts normally have decrease premium payout necessities,” mentioned Agrawal.

As an illustration, Mr A has a medical insurance plan which offers him with a well being cowl of 5 lakh, that includes a co-payment of 50,000. Mr A had a medical emergency due to which he needed to get hospitalised. His medical remedy invoice got here out as 5 lakh. Then out of this 5 lakh, 50,000 must be paid by Mr A and the remaining 4.5 lakh could be paid by his insurance coverage supplier.

These well being plans can also include a sub-limit on the room hire and different related bills. Should you select a room whose hire exceeds the sub-limit, there could be a proportionate deductible in your inpatient hospitalisation declare. Mahyavanshi mentioned, “You should keep away from shopping for indemnity well being plans with sub-limits on room hire and different remedy prices, even when it prices slightly extra as these sub-limits confines the scope of general protection.”

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