Fixed Benefit Health Insurance

The financial health that a family makes over the years can quickly get wiped out in case of a medical emergency. Health insurance can ensure financial protection during unforeseen situations or even if you have planned the hospitalisation. When your health insurance plan pays a fixed amount during health insurance claims, you can rest assured of the well-being of your finance.

Insurers offer Fixed Benefit Health Insurance plans that pay a fixed amount and are not based on the medical expenses incurred. So, what is Fixed Benefit Health Insurance, and how does it impact your claim settlements? Read on to find answers about the fixed benefit policy in health insurance.

When a health insurance plan pays a fixed amount for a pre-defined illness or a health condition, the benefit of receiving a specific sum is referred to as Fixed Benefit Health Insurance. Generally, the insurer pays the specified amount as a lump sum irrespective of the hospitalisation cost subject to terms and conditions of the policy.

For example, Mr A purchased a Critical Illness Health Insurance Policy with a sum insured of Rs. 25 lakhs. Mr A was diagnosed with a critical illness covered under the plan during the policy period. The insurer pays him a lump sum of Rs. 25 lakhs during such a situation irrespective of the actual or estimated medical expenses. Once the insurer pays the fixed sum to Mr A, the policy gets terminated.

The standard health insurance is excellent financial protection against unforeseen and planned hospitalisation. However, it has its limitations. It does not provide coverage for critical illness, and even if it does, the sum insured is less. A Fixed Benefit Health Insurance comes to your rescue during such dire needs.

A Fixed Benefit Health Insurance plan walks that extra mile for you if you are diagnosed with a critical illness such as a heart ailment or even cancer. The cost to treat such critical diseases is much more than the sum insured offered by the standard plan. The fixed benefit plan provides a one-time lump sum payment of the sum insured to fill this gap.

The plan works when you are diagnosed with a pre-defined illness or a listed medical condition. And your policy gets terminated upon the payment of the sum insured.

Here are the merits and demerits of a fixed benefit policy health insurance.

Although a regular health insurance plan offers broad coverage, it has limitations such as limited sum insured amount. Additionally, the insurer provides compensation after the hospitalisation and not before the planned or unplanned hospitalisation.

A lump-sum compensation, especially for treating critical illnesses, is a boon during such hard times. With a lump-sum payment, you can choose the type of medical treatment at a hospital of your choice. It also helps your cash flow and compensates for the loss of livelihood or earnings during treatment and recovery.

If you are looking for a health insurance plan that helps address financial needs in critical illnesses, you should consider buying the Fixed Benefit Health Insurance plan.

Now that you are familiar with a Fixed Benefit Health Insurance plan let us find out the difference between indemnity-based health insurance and Fixed Benefit Health Insurance. While the latter provides the claim amount for medical expenses incurred for treatment up to the sum insured amount, the former pays the sum insured in a lump sum for pre-defined critical illness or medical condition.

Your main aim in buying health insurance is to cover your family against the financial burden of medical treatment or emergencies. Reducing the financial impact should be your goal while securing your family with a robust health insurance plan. For broad coverage along with better compensation for treatment of critical illnesses, choose a regular health insurance plan and include the fixed benefit plan as an add-on. Or, you can buy them separately as per your requirements. 

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.