Indemnity or benefit plan: How can I ensure my child’s health insurance plan covers emergencies, surgeries, and unexpected medical conditions?

As a parent evaluating health insurance from a financial planning perspective, how should I structure my child’s coverage to ensure it adequately handles emergencies, surgeries and unforeseen medical conditions? Should I rely on a benefit plan that pays a fixed lump sum, or opt for an indemnity plan that reimburses actual hospital expenses up to the sum insured?  What sum insured would realistically cover tertiary care costs in metro cities? Does the policy provide day-one emergency coverage, cashless access to a strong hospital network, ambulance benefits and daycare procedure inclusion without restrictive caps?

I would also want clarity on waiting periods, congenital condition coverage and restoration benefits after major claims. Finally, how critical is full disclosure of pre-existing conditions to avoid claim disputes at the time of settlement?

Advice by Anuradha Sriram, Chief Actuarial Officer, Aditya Birla Health Insurance Company

When choosing a health insurance plan for your child, it helps to understand the two main types of products available — Indemnity Plans and Benefit Plans. Benefit Plans pay a fixed lump sum on the diagnosis or occurrence of a specified condition, regardless of the actual treatment cost. Indemnity Plans, in contrast, reimburse actual hospitalisation expenses incurred up to the sum insured, offering broader and more flexible protection.
For a child’s healthcare needs, it is advisable to opt for a comprehensive indemnity health insurance plan, as it can cover a wide range of medical scenarios, including emergencies, surgical procedures and sudden illnesses.

While comparing indemnity plans, look for features that matter most during urgent situations:

Day-one coverage for medical and accidental emergencies, so benefits begin from the first day of the policy.

Access to a wide cashless hospital network, which can help reduce out-of-pocket spending in an emergency.

Ambulance expense coverage, which can be crucial during sudden medical events.

Surgical coverage that includes both traditional in-patient care and medically necessary daycare procedures, without restrictive procedure-wise caps — this helps limit unexpected costs.

Also, check whether the plan covers common childhood illnesses, infections, and other unforeseen conditions. Many modern plans extend benefits to congenital conditions (after specified waiting periods) and include support for mental health or developmental care, adding useful breadth to coverage.

If your child has any pre-existing medical condition, it is important to disclose it accurately at the time of purchasing the policy. Non-disclosure can result in claim rejection later, even during genuine medical emergencies, making accurate disclosure essential for claim eligibility.

Before finalising a plan, Parents should review the initial waiting period, any disease-specific waiting periods, and choose a sum insured that is adequate for potential ICU stays and complex procedures. Features such as sum insured restoration after major claims and lifelong renewability can further strengthen long-term protection.  Aditya Birla Health Insurance offers comprehensive indemnity-based plans like Active One, which provide child-inclusive coverage with day-one emergency care, wide surgical benefits, transparent waiting periods, and rewarding healthy living through HealthReturns. 

To ensure comprehensive coverage for emergencies, surgeries and unexpected health conditions, a broad-based indemnity health insurance plan, backed by full medical disclosure, suitable sum insured and key features like cashless access and day-one emergency benefits can offer better financial safety and ease during claim settlement.