An indemnity plan is a fully-insured or self-insured plan where an assigned payment is made for dental procedures placed into different categories, with each category providing coverage at a different percentage. After a required deductible is met, the plan either pays a set percentage or the amount of the treatment charge determined by the plan to be usual, customary, or reasonable (UCR), with the patient paying any remaining balance.

Indemnity plans allow patients to see the dentist of their choice; however, this type of plan can exclude certain procedures, and the UCR limit may not accurately reflect the standard treatment charge of dentists in an area. This does not mean the dentists overcharge for treatment.