What is the Difference Between Indemnity and Insurance
Knowing what your insurance can do is just as important as knowing how much you pay for it. The issue at hand is that insurance companies would rather you remained uneducated in the language and terminology used to write such policies. Whether you are buying coverage on the open national exchange, the state exchange or through a private insurance provider, you are actually buying it from the same people. It is the manner of access that you are changing. Group coverage or private, the terms remain the same and expect you to pay no matter what in order to get coverage. Your price is based on your knowledge, not on your needs. In fact, many consumers get suckered in to buying what are called paranoia policies, where they are promoted as being needed when they are not and can actually never be used. What is the difference between indemnity and insurance? We will discuss this language in the following article.
What is the Difference Between Indemnity and Insurance?
Then, what is the difference between indemnity and insurance? Indemnity is a protective clause that pays out if anything wrong happens. On the patient side, this actually means not having the right benefits coverage. For businesses, it means paying for malpractice or negligence without damaging the bottom line.
An indemnity example that might make the most sense is malpractice insurance. A doctor or hospital will carry malpractice indemnity coverage to pay out for litigations by patients harmed by the policy recipient.
If you are being pressed by your insurance agent to have some type of indemnity clause or plan in your insurance coverage, make sure you think twice. Read the indemnity form before signing it to make sure it will actually protect you in case a claim needs to be filed.
Indemnity VS Contingency Insurance
So, what is the difference between indemnity and insurance? When looking at indemnity vs contingency insurance, your focus is on where the payment is coming from. With indemnity, it is derived from your own accounts, meaning it is essentially out of pocket. With a contingency plan, you will have a sort of bank of usable funds available that are dedicated to insurance needs. This is done as a way to adjust your taxes so you have some income put aside with a dedicated purpose you will be less taxed upon. It’s all about the finances, as this is a business designed to make money off of your needs.
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