Comparison · 2026
Fixed Indemnity vs Major Medical
Quick answer
Fixed indemnity pays set cash amounts per covered event (lower premium, predictable benefits). Major medical pays a percentage of nearly all covered care after a deductible (higher premium, broader catastrophic protection). Healthy owners often pick fixed indemnity; owners with ongoing care needs usually pick major medical group PPO.
Side by side
| Fixed indemnity | Major medical (Group PPO) | |
|---|---|---|
| How benefits pay | Set dollar amount per event | % of cost after deductible |
| Deductible | $0 | $500–$1,500 typical |
| Catastrophic protection | Limited | Strong, with OOP max |
| Monthly premium | Lower | Higher |
| Best for | Healthy owners, predictable budget | Families, ongoing care, chronic conditions |
Frequently asked questions
What is a fixed indemnity health plan?
A fixed indemnity (or fixed-benefit) plan pays a set dollar amount for each covered medical event — for example, $X per doctor visit, $Y per hospital day, $Z per outpatient surgery. It's not major medical insurance; it's a supplemental-style plan with predictable, first-dollar benefits and a lower premium.
How is major medical different?
Major medical (group PPO, ACA Marketplace, employer plans) covers a percentage of essentially all covered medical costs after you meet a deductible, up to an annual out-of-pocket maximum. Premiums are higher, but the coverage scales to any size of claim.
Which plan is better for a franchise owner?
It depends on your health and budget. Healthy owners with no chronic conditions often pick a fixed indemnity plan for the lower premium and predictable benefits. Owners with ongoing medical needs, prescriptions, or a family typically pick a major medical group PPO for stronger catastrophic protection.
Can I combine the two?
Yes — many owners pair a high-deductible major medical plan with a fixed indemnity plan to cover everyday costs and reduce out-of-pocket exposure. A licensed agent can run the math for your situation.
Is fixed indemnity ACA-compliant?
Fixed indemnity plans are regulated separately from ACA major medical and are not Marketplace plans. They are sold as supplemental or stand-alone coverage and are legal in all 50 states.
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