Planning to purchase health insurance?

Planning to purchase health insurance? Get familiar with these terms

Medical treatment is expensive, especially in private hospitals and healthcare facilities, therefore getting health insurance for you and your family is crucial. It is important to have health insurance since there is a significant risk that, without the lack of coverage, medical crises might at any time cause a financial catastrophe. But one of the biggest difficulties individuals have when opting for a new individual health insurance plan is making sense of the sea of acronyms and jargon. We will explain all the key terms used in health insurance in this post to assist you.

  • Premium– The amount you need to pay the health insurance company for the policy chosen is referred to as the premium. The premium is determined by the policy type, the sum covered, the policyholder’s age, and a variety of other criteria.
  • Cashless claim– As the name implies, the insured can file a claim for medical treatment at the selected network hospitals without having to pay any cash.
  • Sum insured– The Sum Insured is the maximum amount you can claim from your insurance company if you are hospitalized. Any amount above the amount covered must be paid by you. The total insured amount you agree on will be the maximum amount you get in the event of medical treatment or hospitalization. It functions on the indemnity concept, which means that it will reimburse your losses as a consequence of the damage caused to you. It is the monetary compensation you have received for the harm, injury, or loss you have endured.
  • Deductibles– A deductible is a cost-sharing criterion imposed by a health insurance policy that can be either a set sum or a percentage of the claim amount. In case you have chosen a higher deductible, you will have to pay a lower premium. The insurance company will not be obligated to pay for that set or percentage amount of covered expenses under this clause. It is the policyholder’s responsibility to pay the specified deductible amount to the hospital.
  • Add-ons/ Riders– A rider is a type of insurance policy provision that allows the policyholder to modify or adjust the terms of the insurance policy. Riders allow the insured person to add extra coverage or even restrict or limit coverage. Some persons seeking to purchase insurance policies have special requirements that may not be fulfilled by standard insurance policies; thus, riders help them in creating insurance solutions that match their needs. It is also crucial to remember that if a party wishes to acquire a rider, there will be an extra payment.
  • Network hospitals– A network hospital is one that has affiliations with your insurance company, either directly or through a TPA, allowing you to get medical care without paying out of pocket. Insurance companies maintain a list of network hospitals where you can easily submit a claim for cashless treatment.
  • Co-payment– A co-payment is a cost-sharing provision in a health insurance policy. In certain circumstances, the policyholder agrees to pay a set proportion of the hospital expense in accordance with the terms of the policy; this is known as co-payment. As a result, the insurance charges a lower premium. It is crucial to remember that in such circumstances, the sum insured stays unchanged and is not reduced. A senior citizen health insurance plan is more likely to offer this benefit.
  • Restoration– The majority of health insurance policies today include a “restoration benefit.” You receive a “financial backup” to recover your exhausted sum insured. If the entire sum insured is exhausted, it automatically reloads for the subsequent hospitalization within the insurance period.
  • Critical illness– Life-threatening medical problems including cancer, renal failure, and cardiovascular diseases are referred to as critical illnesses or critical medical conditions. These diseases are covered by particular medical insurance plans. Or you can get an additional cover or a rider for the same.
  • Cumulative bonus– The cumulative bonus is identical to the NCB. The sum insured rises by a predetermined percentage depending on the policy for each claim-free year, although it cannot exceed 50% of the Main Sum Insured and is only available if the policy was constantly renewed.
  • Grace period– The designated time of 15 days following the expiration of the premium payment due date. During this time, payments can be made to renew or maintain a policy without losing continuity benefits such as waiting periods and pre-existing disease coverage. However, coverage will not be accessible for the period following the due date. As a result, it is critical to renew health insurance whenever the payment is due. Depending on the illness, waiting periods in health insurance policies range from 12-48 months. When a policy is not renewed, even if it is within the grace period, the continuity benefits are lost.
  • Exclusions– Exclusions are also known as limits. Health insurance firms frequently make these obvious on their websites and in policy wordings. These are the conditions and causes that can result in your health insurance claims being denied and not being processed further.
  • Inclusions– This is something you should double-check. Coverage benefits, also known as inclusions, are the insurance features and perks for which the insurer will reimburse you. It covers hospitalization expenses, ambulance fees, surgery, hospital room bills, anesthesia, medications, and treatment-related expenses.
  • Sublimit– It is a limitation in an insurance policy that limits the amount of coverage available to cover a certain type of expense. It can be defined as an amount or as a percentage.
  • No-claim bonus- If the policy has a claim-free year, you will receive a bonus or a discount on the basic Premium. This benefit grows with each year you do not raise a claim.
  • Waiting period– When a new health insurance policy is purchased, certain policy benefits are not available to the policyholder for a certain period of time. This is normally a predetermined amount of time from the date of policy initiation, after which certain particular advantages of the policy take effect. The typical waiting period for pre-existing conditions, for example, is four years.
  • Pre-existing diseases– Pre-existing disease is defined as any condition, ailment, injury, or any associated condition(s) for which the insured exhibited symptoms, was diagnosed, and/or got medical advice/treatment within 48 months prior to the insurer’s initial policy being issued. Although pre-existing conditions are covered by the insurance after a specific term, it is best to mention any such existing condition and any ongoing medication to the insurer. Non-disclosure may result in the rejection of the claim. Many health plans now cover pre-existing conditions as long as the policy is regularly renewed with the same insurer and without any claims for a period of four years.

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