Author
Bowtie Team
Updated on
2025-07-08
Disclaimer: This article is translated with the assistance of AI.
Reimbursement and lump sum medical insurance are designed to cover expenses for hospital stays, surgeries, and other medical services. Curious about the two compensation methods? Let’s break down “reimbursement” and “lump sum” to see which suits you best!
Reimbursement-Based Medical Insurance
Reimbursement-based medical insurance includes general medical insurance, VHIS , certain accident insurance , and corporate medical insurance. The first three are personal medical plans purchased by individuals for themselves or their families, while the last is provided by companies for employees. Depending on the policy terms and coverage, expenses for outpatient visits, day surgeries , diagnostic tests, and surgical procedures may be covered.
Lump-Sum Medical Insurance Coverage
Lump-sum medical insurance includes certain accident insurance and critical illness insurance . Depending on the policy terms and coverage, if the insured suffers an injury or death due to an accident, or is diagnosed with a covered critical illness , they will receive a one-time or multiple lump-sum payouts. The payout amount is up to 100% of the insured sum, helping to support the insured and their family during recovery or loss of income due to critical illness.
Bowtie Example: Lump-Sum Critical Illness vs. Reimbursement Medical Insurance
When it comes to claims, there’s a fundamental difference between medical insurance and critical illness insurance. The table below compares Bowtie VHIS and Term CI Multiple Cover as examples:
| Bowtie Pink VHIS | Bowtie Term CI Early Stage and Multiple Cover | |
| Claim Method | Reimbursement-based | Up to 5 lump-sum payouts |
| Payout Amount | Based on actual medical items or procedures,
e.g., if daily hospital room charge is $1,000, Bowtie Pink will reimburse $1,000 |
Depends on the type of critical illness,
Payouts range from 20% to 100% of coverage ($100,000 to $4,000,000) |
The claim principle for medical insurance is reimbursement-based , with payouts made according to the policy’s covered items and limits.
For instance, even if the “annual coverage limit” is $200,000, if the “surgeon’s fee” is $40,000 but the “claim limit” for this item is $30,000, the insured will only receive a maximum of $30,000 for the surgeon’s fee.
Claims for critical illness insurance are always paid as a lump-sum cash amount. The condition for payout is a diagnosis of a specified critical illness, and the lump-sum payment from the insurer has no restrictions on usage.
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