What is a Scheduled Benefit in Health Insurance?

Scheduled benefits in health insurance are the predetermined or fixed amounts of money that the insurance company will pay for specific healthcare services. The key difference between scheduled benefits and regular indemnity policies is that scheduled benefits have a predetermined payout structure and provide a lump sum payment.

Meanwhile, indemnity policies cover the actual hospital charges. In India, scheduled benefits are commonly known as defined benefit or fixed benefit health insurance policies.

Keep reading to know more!

How Scheduled Benefit Plans Work

Let's see how a scheduled benefit plan works:

• Fixed Amount of Sum Insured:In this policy, the sum insured is already determined at the time of buying and doesn't vary according to medical bills and expenses. The payout is provided in the form of a lump sum.


• Coverage only for Specific Diseases: These plans cover only certain diseases (such as cancer or critical illness), rather than all medical expenses.


• Payout on Diagnosis of Covered Illness:Only when the insured is diagnosed with a covered disease will the policy benefits be eligible.


• Full Payment without Considering Expenses:Once the insured is diagnosed with the specified disease, the insurance firm pays out the total amount in one lump sum, regardless of the actual cost of the treatment.

For example, if a policyholder decides to buy a ₹20 lakh cover for cancer through a scheduled benefit plan and gets diagnosed with the disease during the policy period, the insurance firm pays ₹20 lakh to them without checking the bill for expenses incurred on treatment.

Advantages of Scheduled Benefits in Health Insurance

Here are a few advantages of health insurance with scheduled benefits to consider:

• Easy Claim Processing:Such plans involve less paperwork and a simple procedure, making the claim process faster and more convenient for the policyholder to receive their payment.


• No Sub-limits for Diseases Covered:There are no sub-limits set by the scheduled benefit plan for payment upon the occurrence of a specific illness. Therefore, the fixed amount is paid without issue.


• Provides Financial Support:The one-time payment can go beyond the cost of treatment and be applied to cover lost wages, home and family maintenance, or children's education.

Disadvantages of Scheduled Benefits in Health Insurance

Here are a few disadvantages of health insurance with scheduled benefits to look at:

• Increased Premiums:Insurance policies that provide fixed benefits often have higher premiums because they guarantee payment of a lump sum amount to policyholders.


• Restriction in Coverage Area:Such insurance policies cater only to certain diseases or ailments, which limits their application and coverage.

With scheduled benefit plans, there is a guaranteed lump-sum payment that can greatly ease any financial burden when urgent medical care is needed. Although these plans cannot cover all the expenses involved in a medical situation, they are very handy when dealing with secondary costs such as lost income, household expenses, and recovery-related costs.

Nevertheless, these plans should be complemented by an indemnity health insurance policy for adequate coverage.