Health Insurance Terminologies Explained

Healthcare expenses are rising at a fast pace and the best way to beat such inflation is to buy health insurance. An insurance policy covers your hospitalization bills, doctor’s fee, drugs and tests cost, etc. At times, you may find it difficult to understand different health insurance jargon. So, we provide you a quick guide on different health insurance terminologies below.

Accumulation Period

Health insurance comes with an initial waiting period of 30 days also known as the accumulation period. If any medical expenses are incurred during this period, the insurer will not cover such expenses. However, the accumulation period doesn’t apply to accidental injuries.

Claim Settlement Ratio

A claim settlement ratio is the total number of claims that an insurance provider has settled in a financial year against the total number of claims received. Considering the claim settlement ratio of your insurer, you can find out how quickly your claims will be settled.

Co-payment

Health insurance policies come with a co-payment clause, which is the percentage of the claim amount that you’ll pay on your own when a claim arises. For instance, if there is a 10% co-payment and the claim amount is INR 1 Lakh, you need to pay INR 10,000 on your own while the rest will be covered by the insurer. Not all policies have a co-payment clause and if you voluntarily choose co-payment, you might get a discount on your premium.

Congenital anomaly

A congenital anomaly is a condition where the body structure is deformed since birth, it can be internal and external.

Cumulative Bonus

A cumulative bonus is a reward that you’ll get after every claim-free year. Your sum insured will increase by 10-50%, subject to a maximum of 100% of the sum insured, on doing so.

Condition Precedent

The policy terms and conditions that are mentioned in the policy contract are termed as a condition precedent.

Deductible

At inception, you need to choose a deductible (fixed amount) that you’ll pay from your end whenever a claim arises. The insurer will cover the medical expenses where the claim amount exceeds the deductible. Suppose your claim amount is INR 1 Lakh and the deductible is INR 10,000, the insurer will pay INR 90,000.

Daycare Procedures

If the hospitalization is less than 24 hours due to technology advancement or you receive medical treatment in a daycare center, such medical expenses come under day care procedures. It will include dialysis, chemotherapy, radiation, fracture reduction, cataract treatment, etc.

Dependents

Health insurance plans can be purchased on an individual or family floater basis, and the additional individuals covered under the policy, such as spouse, children and parents, are known as dependents.

Free Look Period

A free look of 15 days starts from the date of receipt of the policy document. During this period, you can review the terms and conditions of your health insurance and return the same to the insurer if found the same unacceptable. You need to state the reason for your objection while returning the policy. If you cancel your policy during the free look period, you’ll be entitled to a refund of the paid premiums less the medical examination and stamp duty charges.

Pre & Post-hospitalization

Health insurance covers your medical expenses incurred before hospital admission, which is known as pre-hospitalization cover. Similarly, the medical expenses incurred after discharge from the hospital are covered too. While a pre-hospitalization cover can last up to 30-60 days, post-hospitalization can go for around 60-180 days. The pre-and post-hospitalization coverage limit may vary from insurer to insurer.

Network Hospitals

The insurance company has a list of hospitals across India where you can receive cashless treatment. These hospitals are called network hospitals.

Tertiary Care

An advanced and specialized medical care unit where complex medical illnesses are treated is termed Tertiary Care.

TPA

The Third Party Administrator (TPA) is responsible for coordinating and managing health insurance claims. You need to get in touch with the TPA to start the claim process. TPA is an intermediary between the insured and the insurer.

Waiting Period

There’s a waiting period in health insurance during which you can’t file a claim against pre-existing diseases. Usually, the waiting period is 24-48 months and it may vary from insurer to insurer. There are also policies like Star Health Diabetes Safe, Aditya Birla Activ Health Platinum, HDFC Ergo Health Energy where you can get coverage for your pre-existing diseases from day one.