Know the Health Insurance Jargon

Read on to know the important health insurance terminologies that you should understand before buying a medical insurance plan.

Health Insurance Terminologies You Must Understand Before Buying a Plan

Over 60 percent of urban women are vulnerable to heart disease, says an article published in The Indian Express in December 2015. Medical insurance has become a priority in today’s time. You might be able to take care of day-to-day healthcare expenses; however, unpredictable hospitalization costs can eat away all your savings. Life is unpredictable and you must get yourself and your family health insured to stay prepared for any eventuality. Unlike life insurance, which is more important for the earning family members, health insurance is a must for all.

Health Insurance

Health Cover Terms Decoded

Medical insurance policies are complex products. You might come across many confusing terms in the policy document. It is wise to know the meaning of such terms and their implication on claims settlement. Given below are some terms you should be familiar with:

  1. Premium – This is the amount you pay every year in order to reap the benefits of the policy when the time arrives. The premium determines the cover amount. While lower premium might seem more convenient, you must opt for premium that is sufficient to meet unexpected hospitalization costs for yourself and your family.
  2. Deductible – This is the minimum amount that you must bear in case of claims settlement. For example, if you have an accident and need immediate medical relief that will cost you Rs 35,000 and your deductible is Rs 10,000, then you will need to pay Rs 10,000 towards the medical bills while the rest will be paid by the insurer. In cases where the treatment cost does not exceed the deductible, the insurer will not pay you any money. You should only go for a higher deductible if you have minimal health risks.
  3. Co-pay – This refers to a clause that says that in case of claims settlement, the insurer with only pay a certain percentage of the treatment while the rest would be paid by you.
  4. Exclusions – A policy may not cover all types of illnesses. Exclusions may include illnesses like diabetes, dental issues, and other diseases. You must read the policy carefully to understand what all is covered. Previous illnesses may not be covered during the initial years.
  5. Sub-limit – This is the maximum capping for various benefits provided under the policy. For example, a policy may have Rs 4,000 as the sub-limit on room rent. If you spend more than this limit, then you not only pay the extra amount yourself but it also affects the overall sum assured. Go for a plan that has a high sub-limit or no capping at all.
  6. Cooling Period or Waiting Period – This is time after purchasing the policy during which you cannot make a claim. This may vary across from one insurance company to another (usually 30 days to 90 days).

It is essential to read the health insurance policy documents carefully so that you are sure that you will be able to make a successful claim when needed.