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    Health Insurance Terms Made Easy To Understand.

Cashless Facility/Cashless Hospitalisation

Cashless facility means a facility extended by the insurer to the insured where the payments, of the costs of treatment undergone by the insured in accordance with the policy terms and conditions, are directly made to the network provider by the insurer to the extent pre-authorization is approved.

Condition Precedent

A Condition Precedent refers to a term or condition in a policy upon which the insurer's liability is conditional. It simply means that specific conditions or events must occur before an insurance provider is liable to fulfil the obligations listed in the policy document. In health insurance, paying a deductible is an example of a condition precedent, wherein insurers are liable to make payments only after the policyholder bears costs up to the predetermined deductible amount.


A co-payment is a specific portion of the claim amount that policyholders need to pay out of their pockets as per the policy terms. The insurance provider pays the remaining amount up to the sum insured. In co-payment, the expenses incurred are divided between policyholders and insurance providers, and the co-payment amount is usually listed as a percentage of the total admissible claims amount.

Cumulative Bonus

A cumulative bonus is defined as an addition or increase in the sum insured amount of a medical insurance policy. Insurance providers offer this benefit without increasing the premium amount when policyholders do not file any claims during a policy year. The cumulative bonus increases for each claim-free year in specific percentages as per the policy term. Most insurers typically offer a 50% cumulative bonus for five consecutive claim-free years.


In health insurance, coverage represents the medical costs and benefits (financial or otherwise) a health insurance provider is obligated to cover when a policyholder requires hospitalisation, treatment, or other forms of medical care, per the policy terms. Insurance companies generally mention the extent of coverage and exclusion in the health insurance policy document.

Coverage Period

Coverage Period is defined as the period from the date an insurance policy commences up to its expiration date. It is the period of time during which a policyholder or insured party is eligible for the benefits and coverage offered under an insurance plan. Most medical insurance policies come with a standard coverage period of one year, after which the policyholder must renew the policy to receive uninterrupted coverage.


A claim is a formal request made by a policyholder to an insurance provider. A policyholder typically has to file a claim to receive compensation, reimbursement, or other associated insurance policy benefits. Policyholders must submit the necessary documents supporting their claim, including medical bills, diagnostic tests, etc. The insurance company evaluates these documents before honouring the claim.

Claim Settlement Ratio

A claim settlement ratio is a numerical metric. It helps potential insurance buyers gauge an insurance company's capacity to settle insurance claims against the number of claims received in a given financial year. The claim settlement ratio is usually expressed in percentages and includes submitted, pending, and honoured claims in a given year.

Critical Illness

Any disease, illness, or sickness that is critical, severe, or life-threatening is regarded as a critical illness. Policyholders diagnosed with critical illnesses typically need to undergo extensive treatment, for which the treatment expenses may be significantly higher. Cancer, kidney failure, and cardiovascular problems, are common examples of critical illnesses.


A Co-morbidity refers to two or more co-existing health conditions, illnesses, or diseases diagnosed in a patient. A co-morbidity may often occur with a primary condition. For instance, a heart attack may occur with vascular disease or a stroke. Co-morbidities may also interact with each other or exist separately, e.g., a patient with high blood pressure may receive a cancer diagnosis.

Convalescence Benefit

A Convalescence Benefit is a cash benefit an insurance company provides to its policyholders. Insurers provide this benefit during the time a policyholder is recovering in the hospital, in case patients need to stay in the hospital for an extended period. Insurers generally offer the Convalescence Benefit in the form of a lump sum per the terms defined in the policy document.

Critical Health Insurance Plan

A Critical Health Insurance Plan covers the cost of various critical illnesses like cancer, cardiovascular diseases, kidney problems, etc. These plans usually come with higher sums insured than standard health insurance policies. Customers can purchase separate critical illness insurance plans along with their standard medical insurance policy. These insurance plans come with longer waiting periods of up to 4 years.

Covid-19 Health Insurance

Covid-19 Health Insurance policies are medical insurance policies launched by the Indian government after the coronavirus outbreak. Policyholders can buy these policies to bear the high cost of covid treatment. They can also choose from various Covid Health Insurance plans like the Arogya Plus Health Insurance Plan, the Arogya Premier Health Insurance Policy, the Arogya Sanjeevani Health Insurance Plan, the Covid Kavach Health Insurance Plans And the Corona Rakshak Health Insurance Policy, based on their preferred type of coverage and sum insured.