Navigating health insurance policies can feel overwhelming, especially with the jargon-heavy language often used by insurers. Understanding key terms is essential for making informed decisions when choosing, using, or renewing a health insurance plan in India.
This glossary breaks down the most commonly used health insurance terms India, helping you decode your policy with ease.
1. Premium
The amount you pay to an insurer for your health insurance policy, either monthly, quarterly, or annually.
- Example: A policy with a premium of ₹10,000 per year covers hospitalization and related expenses up to the insured sum.
2. Sum Insured
The maximum amount the insurer will pay for claims during a policy year.
- Example: If your sum insured is ₹5 lakh, the insurer will cover medical costs up to ₹5 lakh in a year.
3. Deductible
The fixed amount you must pay out-of-pocket before the insurer covers the remaining expenses.
- Example: If you have a ₹10,000 deductible, you must pay this amount first before the insurer contributes.
4. Co-Payment (Co-Pay)
A percentage of the claim amount you agree to pay, with the insurer covering the rest.
- Example: If your co-pay is 10% and the claim is ₹50,000, you pay ₹5,000, and the insurer pays ₹45,000.
5. Network Hospital
Hospitals partnered with your insurer to offer cashless treatment.
- Example: If you visit a network hospital, your insurer directly pays the medical expenses without you needing to claim reimbursement.
6. Cashless Facility
A service where the insurer directly settles bills with the hospital for covered treatments at network hospitals.
- Benefit: Eliminates the need for upfront payment during emergencies.
7. Claim
The formal request made to your insurer to cover medical expenses.
- Types: Reimbursement (you pay first, then claim) or cashless (insurer pays directly).
8. Claim Settlement Ratio (CSR)
The percentage of claims an insurer settles compared to the total claims received in a year.
- Importance: A high CSR indicates a reliable insurer.
9. Pre-Existing Disease (PED)
Any health condition you had before buying the policy. Coverage for PEDs often starts after a waiting period.
- Example: Diabetes diagnosed before purchasing a policy may have a waiting period of 2-4 years.
10. Waiting Period
The time you must wait after purchasing a policy before certain benefits or treatments are covered.
- Example: A policy may have a 30-day waiting period for general illnesses and 2 years for specific treatments.
11. Room Rent Limit
The maximum daily amount your policy covers for hospital room charges.
- Example: If the limit is ₹5,000 per day and the room costs ₹7,000, you pay the ₹2,000 difference.
12. Daycare Treatment
Medical procedures requiring less than 24 hours of hospitalization, often due to advanced technology.
- Examples: Cataract surgery, chemotherapy, or dialysis.
13. Critical Illness Cover
A policy add-on or standalone plan that provides a lump sum payout upon diagnosis of specified life-threatening conditions.
- Examples: Cancer, heart attack, or kidney failure.
14. Top-Up Plan
An additional coverage option that kicks in after your base policy sum insured is exhausted.
- Example: If your base policy covers ₹5 lakh, a top-up plan can provide coverage beyond that limit.
15. No-Claim Bonus (NCB)
A reward given by insurers for each year without a claim, often in the form of an increased sum insured or discounted premiums.
- Example: Your sum insured may increase by 10% annually for no claims.
16. OPD Coverage
Covers outpatient expenses like doctor consultations, diagnostic tests, or minor treatments that don’t require hospitalization.
- Benefit: Reduces out-of-pocket expenses for frequent medical visits.
17. Portability
The right to switch health insurance providers without losing benefits like waiting periods or NCB.
- Benefit: Offers flexibility to find better coverage or service.
18. Exclusions
Medical conditions or treatments not covered by your policy.
- Example: Cosmetic surgery, self-inflicted injuries, or dental treatments are common exclusions.
19. Free Look Period
The time given to review your policy after purchase, during which you can cancel it for a full refund if dissatisfied.
- Example: Most insurers offer a 15-day free look period.
20. Floater Plan
A family health insurance plan where the sum insured is shared among all members.
- Example: A ₹10 lakh family floater plan covers all listed members, but the total coverage cannot exceed ₹10 lakh for the year.
21. Sub-Limit
A cap on specific expenses under your policy, like room rent, ambulance charges, or surgery costs.
- Example: Your policy may limit ambulance expenses to ₹2,000 per hospitalization.
22. Reinstatement Benefit
Restores your sum insured if it gets exhausted during the policy period.
- Benefit: Ensures continued coverage for subsequent claims in the same year.
23. AYUSH Treatment
Covers alternative treatments under Ayurveda, Yoga, Unani, Siddha, and Homeopathy.
- Relevance: Increasingly popular among Indian policyholders.
24. Grace Period
The extra time given after the premium due date to renew your policy without losing coverage benefits.
- Example: Typically ranges from 15 to 30 days.
25. Medical Underwriting
The process where insurers assess your health risks based on medical history, age, and lifestyle before issuing a policy.
- Impact: Determines your premium and coverage eligibility.
Conclusion
Understanding health insurance terminology is crucial for navigating policies, comparing plans, and maximizing benefits. Armed with this glossary, Indian policyholders can confidently evaluate their options and make informed decisions, ensuring the right coverage for themselves and their families.
