We seldom make full use of our health insurance policies. One reason for this is our inability to understand the technical health insurance terms used in the fine print of policy documents. Here we decode some of the terms that are regularly used by the insurance companies.
In health insurance, benefit refers to the total amount that the health insurance company will pay the policyholder to compensate for medical bills expenses incurred by him.
As per the health insurance glossary, the coverage amount is the total amount that the policyholder can claim from the insurance company for medical bills incurred. If the expenses are higher than the coverage amount, then the policyholder has to meet the balance on his own.
If you have a co-payment clause in your family floater policy. The policyholder pays a premium for it. The premium amount can also be paid yearly, half-yearly or quarterly.
Hospital admission for at least 24 hours or one day is termed as in-patient hospitalisation. It is the basic requirement for the insurer to claim coverage against the health plan. However, all plans also provide a few day care treatments for which the insured can claim insurance coverage even if he or she is not hospitalised for this time period.
The individual or individuals covered under a particular medical insurance policy is the insured. In case they fall sick and are required to be hospitalised, the insurance company covers the expenses.
Often the health insurance company is also referred to as the insurer.
Medical expenses such as X-ray, Lab fee, admission fee etc., that are often not covered by the medical insurance policy are termed as miscellaneous expenses. Policyholders will pay for such. These miscellaneous expenses are mentioned in the policy documents in some form. Carefully look for them.
If you have a claim-free year, then you can have a higher coverage (sum insured) amount at the same premium level as no-claim bonus (NCB). It is the way by which insurers reward the policyholders for having a claim-free year.
The amount of the sum insured can be increased every year by 5-50 per cent through NCB. Over the years, one can accumulate enough NCB to increase the coverage amount by up to 100 per cent.
One who has bought the health plan is a policyholder.
It is the amount of money the policyholder has to pay to the insurance company for keeping the policy active. It can be paid as monthly, quarterly, half-yearly or yearly, depending on the terms and conditions of the policy.
In case the policyholder consumes the entire coverage amount on being hospitalissed and still need more, then few insurance companies add more coverage to the health plan without taking any additional premium. This is called restoration. There are some rules around it which are insurer specific. Read the policy papers before applying for it.
It is a provision that offers additional benefits to your insurance policy. This is applicable for most types of insurance coverage. If you have bought health insurance, you can buy a critical illness rider with it. If you are diagnosed with one of the listed critical illnesses in the policy, the insurance company will pay the sum assured for the rider.
A sub-limit is a cap of how much a policyholder can claim for a particular expense/procedure. For example, there is a cap for knee surgery, cataract per eye etc.
The waiting period is a kind of a hibernation period during which no claim will be admissible. The waiting period might vary between one year and four years. While all health insurance plans come with a waiting period of at least one month, some plans provide cover for accidental hospitalisation from Day 1 of the insurance coverage.
For treatment of a few diseases such as tonsils, hernia and cataract, policyholders need to wait one year in some medical insurance plans. Your insurance provider would specifically mention this in policy documents. The waiting period is usually 2-3 years for pre-existing illnesses.
Now that you know most of the basic health insurance terms, you can make full use of your insurance policy and reap its many benefits.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.