What does an indemnity plan typically provide to the insured?

An indemnity plan typically provides the insured with a specific dollar amount for services rendered. This type of plan operates on a fee-for-service basis, meaning that it allows insured individuals to visit any healthcare provider, but the insurance company will reimburse them for a predetermined amount after the service is received. This might mean that some out-of-pocket expenses are incurred by the insured, as the plan does not cover the entire cost of services.

This characteristic of indemnity plans emphasizes flexibility and the ability to choose providers, but it also means that insured individuals need to manage their expenses effectively. Unlike managed care plans that may offer discounted rates or network access, indemnity plans explicitly define the dollar amounts reimbursed, making it crucial for policyholders to understand their benefits and potential costs associated with their healthcare choices.