Health Insurance BLog - What are defined benefit health insurance policies?

Health Insurance BLog - What are defined benefit health insurance policies?

Defined benefit plans need to be seen as income supplement plans and can be taken over and above indemnity plans. Photo: Mint

There are two types of health insurance plans: indemnity and defined benefit plans.
A basic health insurance policy that pays for your hospitalisation expenses is an indemnity product. It pays for your hospital bills up to the sum insured. This coverage also includes pre- and post-hospitalisation expenses and listed day-care procedures.
A defined benefit policy, on the other hand, pays a stipulated sum on an insured event. Both life and non-life companies can offer defined benefit plans.
Policies like hospital cash policy, major surgical benefit policy and critical illness policy are defined benefit plans.
A critical illness policy is the most popular defined benefit plan. It pays the insurance cover—or the sum assured—on diagnosis of an insured critical illness; it doesn’t matter what the hospital bill is.
Most of these plans cover critical illnesses such as cancer, kidney failure, heart attack, major organ transplant and stroke. But you need to keep in mind that typically these plans terminate after the first claim and few plans that cover multiple critical illnesses, cap the benefit amount. What you should also keep in mind is that critical illness plans come with a survival period clause of a month. In other words, you need to survive for about 30 days after a critical illness is diagnosed to make a claim.
Given that indemnity plans reimburse your hospitalisation costs, you need to buy them first. Defined benefit plans need to be seen as income supplement plans and can be taken over and above indemnity plans.
source : https://www.livemint.com/Money/XrIEeeGHs2lO9WfPuCuN5M/What-are-defined-benefit-health-insurance-policies.html

Latoya T. Buckingham

I am a writer who studies many things about current events.

3 Comments

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  1. Its a great blog indeed, thank you for sharing informative article about health insurance with us.

    ReplyDelete
  2. Hi,

    There are many health insurance companies, but it's hard to find the one which might be the best for you. Thank you for sharing this guide about the benefits of healthcare insurance. You know, after reading this blog, it became easy to decide which healthcare insurance company would suit you.

    I also want to share a quote about healthcare by 'Bart Stupak'

    I believe everyone should have healthcare. In all my correspondence - I've been saying for years - it's a right, not a privilege.

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