An Overview of Indemnity Insurance
When we speak of insurance, we typically refer to health, life and car insurance. However, there is another form of insurance that is more common than these, and that is called indemnity insurance. This insurance is more commonly known as an “advance”. What exactly is meant by this?
Indemnity is basically a contractual duty of one party to reimburse the other party for the loss incurred as a result of the indemnifier’s acts. Generally, the indemnity insurance is designed to reimburse the insured for major medical expenses up to a pre-determined amount. The obligation to indemnity is generally, though not necessarily, coextensive with that of the major medical health insurance plan. An additional feature of an indemnity plan is that the insured pays a deductible, which must be paid by the insured before coverage can be obtained.
Who are the persons who need to buy this insurance? Generally, the persons who require such protection are those who engage in hazardous occupations or engage in medical practices that present them with a high degree of risk of injury or illness. If you are an employer, an employee or an acting on behalf of an employee who has been injured at work, you will benefit from the application of a fixed indemnity plan. The cost of such plans is based on the extent of your business activity and the volume of medical care you deal with on a day to day basis. A standard health care insurance plan will also reimburse you for your lost wages if your employee is unable to work because of injury or illness. The type of plan you purchase can also vary depending on the risk factors that are involved with your business activity.
When you are looking for health plans, you will find that there are two types of indemnity health insurance plans. One is the fee-for service plan and the other is managed care coverage. If you already have a primary care doctor and you do not want to change your primary care doctor, then you should purchase a fee-for-service indemnity plan. For those who wish to choose their own doctor, you can also opt for indemnity medical plans that allow you to select a primary care doctor that accepts the Medicare program.
If you have a high-deductible health care plan, then choosing a fixed indemnity insurance plan would be ideal for you. With this type of policy, the insurer will pay the entire deductible amount up to a certain level after which the insured will only pay the deductible amount. There are also different plans that offer a deductible of $500 or less. For this kind of policy, you will be able to save money on premiums.
However, when comparing the various types of insurance plans and choosing a policy that offers a low deductible, you should also consider co-insurance. The co-insurance premium you will pay is equal to two percent of your monthly premium. Co-insurance can be an ideal option if your deductible exceeds your monthly premium. The main disadvantage of co-insurance is that it does not cover the entire cost of your hospital bills and other services. For those who cannot afford to pay the deductible, they may end up paying the co-insurance premium.
Many people choose a standard indemnity health plan, even if they are already covered by a group health plan. Standard indemnity health plans often have lower premiums. However, you may not be able to find the best rates depending on your current health status and needs. You can also opt for a high deductible plan if you do not need to use co-insurance. This is an ideal option for individuals who do not have many medical problems and do not face any major medical problems in the future.
You should choose an indemnity health insurance plan based on your needs. If you smoke and have no pre-existing medical conditions, you should choose a standard indemnity health insurance plan. If you smoke and you have a family, you should opt for a high deductible plan so that you can take care of your family and protect them against serious health care costs. If you do not have any health care needs and you have no family, you can choose a standard indemnity health care policy.