35 Must Know Health Insurance Terminologies in India

Basic Terminologies Used in Health Insurance

Here are 35 important terms in health insurance that could motivate you to go ahead and buy the right insurance policy. Read on to know more:

1. Add-on Covers/Riders/Optional Covers: Add-ons covers in health insurance are additional features that policyholders can add to their basic health plan on the payment of an extra premium. Some add-on/optional covers that you can choose to enhance your base health insurance plan are critical illness cover, maternity cover, room rent waiver, hospital cash benefit, etc.
2. Automatic Restoration: Nowadays most health plans offer 'restoration benefit'. It is the facility of refiling the sum insured amount before the policy renewal date when the original sum insured is exhausted due to one or multiple claims in a policy period.
3. AYUSH Treatment: AYUSH treatment includes medical care using traditional systems like Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homeopathy. Many health insurance plans cover the cost of these treatments.
4. Bariatric Surgery: Bariatric surgery, also called weight-loss surgery, is done to treat obesity or help reduce weight. Some health insurance policies include coverage for this surgery.
5. Cashless Claims: It refers to health insurance claims filed for a medical treatment availed in the network hospitals.
6. Claim: A health insurance claim is a request made by the policyholder to the insurance company to pay for medical expenses covered under their policy. If the claim is not approved, policyholders have to cover the costs themselves.
7. Co-payment: Some of the health insurance plans have a co payment or copay clause. It is a fixed percentage of the claim amount that the insured/policyholder has to borne. The co-payment option does not impact the sum insured but can help lower your premium to some extent. However, it increases your out-of-pocket expenses.
8. Critical Illness: Critical illness refers to life-threatening medical conditions like cancer, kidney failure, and cardiovascular diseases. There are special medical insurance plans that cover these illnesses. You can even get such illnesses covered by adding a specific rider to your base health policy.
9. Coverage: Coverage is the range of benefits included in a health insurance plan. The more coverage a plan offers, the more benefits you will get.
10. Cumulative Bonus: A cumulative bonus is an increase in the sum insured amount without an increase in your health insurance premium. It is usually given as a reward for not filing a claim in the previous policy year.
11. Day Care Procedures: Day care procedures are treatments or surgeries requiring less than 24 hours of hospitalization due to advanced medical techniques. Most basic health plans cover these procedures.
12. Deductibles: A deductible is a fixed amount that the policyholder must pay out-of-pocket for medical expenses before the insurance company starts covering the rest. It is a portion of the total claim amount, and once this amount is paid, the insurer covers the remaining eligible expenses.
13. Dependent: Dependents are family members of the policyholder who can be included under the same mediclaim policy. Dependents generally include your spouse, children, parents & parents-in-law.
14. Domiciliary Treatment: Domiciliary treatment is the treatment, or medical care received at home under a doctor’s supervision when getting admitted in a hospital admission is not possible. Many health insurance policies cover this treatment under domiciliary hospitalization.
15. Entry Age: Entry age is the age at which people can buy a medical insurance policy. Most health plans come with a minimum entry age of 91 days with no cap on the upper age limit.
16. Exclusions: Exclusions are conditions and circumstances that are not covered under your mediclaim policy. Claims related to exclusions can get rejected and will not be processed further. The health insurance companies usually mention exclusions on their website and in policy wordings clearly.
17. Family Floater: A family floater is a plan where a single sum insured is shared among all covered family members. A family floater policy is more cost-effective than buying separate policies for each person.
18. Free Look Period: The free look period is the first 30 days after buying a policy. During this time, policyholders can cancel or switch their policy without a fee. In case of cancelation, the premium amount is refunded.
19. Grace Period: The grace period is the period that starts after the due date of a Mediclaim policy. It generally ranges between 15-30 days. During this time, policyholders can pay the due premium without losing continuity benefits like the waiting period.
20. Inclusions: Inclusions refer to the policy features and benefits that the insurer will compensate you for.It includes hospitalization expenses, surgery cost, ambulance charges, hospital room bills, and treatment-related expenses.
21. Indemnity Plan: An indemnity plan is a kind of health policy that reimburses the actual medical expenses incurred. While making a claim, the policyholder needs to submit medical bills, and the insurer will pay the claim amount, which will be equivalent to the bill amount.
22. Insured: The insured is the person covered under a health insurance plan who can receive its benefits.
23. Insurer: The insurer is the company providing health insurance and paying for the medical expenses of the insured.
24. No Claim Bonus: A No Claim Bonus (NCB) is a discount offered by insurance companies to policyholders for not making any claims during the policy term. No-claim-discount of around 20-100% can be earned by the policyholders for not making a health claim.
25. Network Hospitals: Every health insurance company in our country has a tie-up with a certain number of hospitals called as network hospitals. These are the hospitals where you can avail treatment without the need to pay the bills. Instead, the insurer settles the bill directly with the hospital up to the coverage limit.
26. Portability: Portability is the process of switching your existing health insurance company or policy to a new insurance company or policy without losing continuity benefits such as the waiting period. It is generally helpful if you are not satisfied with your current insurer or policy.
27. Pre-existing Diseases: Pre-existing diseases are medical conditions or illnesses diagnosed within four years before purchasing a health insurance policy. Most health plans provide coverage for these conditions after a waiting period of 2 to 3 years. Patients with pre-existing medical conditions are considered to be at a higher risk and are therefore charged with a higher premium.
28. Premium: Health insurance premiumrefers to the amount that you need to pay to the health insurance company against the policy purchased. The premium depends on the policy type, the sum insured, age of the policyholder, and various other factors.
29. Preventive Health Check-up: A preventive health check-up involves medical tests to evaluate the health and detect potential risks early, helping to prevent future illnesses.
30. Room Rent Limit: Room rent limit is the maximum amount your insurance will pay for hospital room charges. If the cost exceeds this limit, the policyholder must pay the extra amount.
31. Sub-limits: Sub-limits are caps on the amount covered for specific benefits in a health insurance plan, such as room rent. If the cost exceeds the sub-limit, the policyholder must pay the difference.
32. Sum Insured: The policy coverage amount is termed as the sum insured. The insurer compensates an amount equal to the sum insured which can range from ₹5 lakh to ₹100 crore.
33. Top-up Plans: These are the policies that you can buy along with your base policy. Once the sum insured of the base policy gets exhausted, your top-up plan will cover the cost of the treatment.
34. Underwriting: Underwriting is the process where health insurance companies reviews an applicant’s medical history and personal details to decide whether to approve the policy and how much premium amount must be charged.
35. Waiting Period: In a medical insurance policy, there is a fixed time period before which you cannot avail the coverage benefits. During the waiting period, health insurance claims are not admitted. The waiting period for different health conditions and coverage varies.

Bottom Line

These were some of the healthcare buzzwords that will help you in shopping for the right health insurance policy. We think now you will agree that some knowledge beforehand will go a long way in and everything will start making sense. This will allow you to make smart decisions for yourself and your family, especially in terms of medical insurance.