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What are indemnity based health insurance policies: learn it here


Health insurance


A health insurance plan is one of the strongest shields against unplanned medical expenses.  The most commonly purchased health insurance plans are indemnity-based health insurance plans and are also commonly referred to as mediclaim policies.

Compensation-based health insurance policies typically pay actual hospitalization expenses incurred during treatment to the extent of the policy's sum insured.  

This means that the insurer will pay you the treatment cost within the limit of the sum insured given under the policy.  Indemnity health policy can be a regular or comprehensive health insurance policy for individuals, families and senior citizens.

comprehensive coverage

As the name suggests, these schemes operate on the principle of indemnity, that is, in case of medical expenses incurred by the policyholder, the insurance company will reimburse these expenses, subject to the maximum insurance limit.  

Ankit Aggarwal, CEO and co-founder of BimaDekho, said, "These plans include pre-hospitalization expenses, doctor's fees, ICUs, room fees, clinical trials, surgeries, medicines as well as hospitalization."  

Provide coverage for subsequent expenses.  And daycare treatments.  These plans also cover the treatment cost for Covid-19 treatment.  However, these plans come with a clause that requires a minimum of 24 hours of hospitalization to be eligible for a claim. "

In addition, there may be some deduction for the cost of consumables such as PPE kits when billed separately at the time of claim.  However, the remaining amount will be payable.  

“For new Indemnity Health plans, Kovid treatment will be covered after the initial waiting period of 30 days.  If you have a current policy, Kovid will be admitted to the hospital at any time, ”said Dhirendra Mahavanshi, co-founder, Turtlemint, an Insurtech firm.

Mahayavanshi further said, "In case of hospitalization at home, due to non-availability of hospital beds or if you are not in a position to be taken to the hospital, the cost of treatment will be covered under 'Home Remedies'.  Which is covered under most. Health plans. "

Cashless treatment

Insurance companies typically have alliances with many hospitals and medical facilities.  

It provides two types of benefits to policyholders of indemnity-based health insurance plans.  First, they enjoy the flexibility to choose from many hospitals and medical facilities that provide quality treatment. 

Secondly, in these partner hospitals, anyone is eligible to avail cashless treatment ie medical bills are paid by the insurance provider directly with the hospital and pay anything (except co-paid shares) to the policyholder from his own pocket.  Is not required to do.  The list of nearby hospitals with cashless facilities can be checked before purchasing health insurance. 

Co-payment and sub-limit

In health insurance, co-payment refers to the portion of the medical bill that is agreed to be paid by the policyholder and not by the insurance provider.  It can be given as a fixed amount or a fixed percentage of treatment expenses.  

“Most indemnity-based health insurance plans come with a co-payment option.  Schemes with high co-payment components usually have lower premium payment requirements, ”said Aggarwal.


For example, Mr. A has a health insurance scheme which provides him a health cover of ₹ 5 lakh, which includes a co-payment of ₹ 50,000.  Mr. A had a medical emergency, due to which he had to be hospitalized.  His treatment bill turned out to be ₹ 5 lakh.  Then out of this ₹ 5 lakh, ₹ 50,000 will have to be paid by Mr. A and the remaining ₹ 4.5 lakh will be paid by his insurance provider.

These health plans may also come with a sub-limit on room rent and other related expenses.  

If you choose a room whose rent exceeds the sub-limit, there will be a proportional deduction on your hospitalization claim.  Mahayavanshi said, "You should avoid purchasing compensatory health plans with a sub-limit on room rents and other treatment costs, even if it costs a little more because these sub-limits limit the scope of overall coverage.


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