Health · Chapter 13 · Overview
"Indemnity" — Two Meanings in Health Insurance
Definition
For medical and dental insurance, an "indemnity plan" is a traditional contract that reimburses the policyholder for covered expenses. For disability, long-term care, and hospital (income) indemnity plans, it means a flat dollar amount paid periodically — for hospital indemnity and LTC, regardless of actual costs.
In plain English
Same word, two jobs: sometimes "pay back what you spent," sometimes "pay a preset amount per day/week/month no matter what you spent."
Exam tip
The exam tests this by context. Ask: is the question about reimbursing expenses (medical/dental) or a flat periodic benefit (disability/LTC/hospital indemnity)?
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms