Health Insurance Jargons are Important - Here’s Why

For ordinary people, health insurance jargon might often be very confusing because you do not have to use them regularly. However, health insurance plans come to use only when there is a sudden requirement or medical emergency, be it pregnancy, surgery, or an accident. The basic idea is to have the money in store so that you do not need to think about it during a health crisis. However, a lack of knowledge about insurance jargon can make things only more difficult.

Following are some of the important health insurance jargons and why you need to know them:

Sum Insured

Sum insured is the maximum amount that the health insurance provider is going to pay under any situation of medical crisis. Indemnity insurance also means that the insurance provider will pay the exact amount of money that has been spent on the treatment. Therefore, if the health insurance claims have a maximum budget of INR 5 lakh and you need only INR 2 lakh, you will only get INR 2 lakh for the treatment, considering the plan covers the ailment. However, if you need INR 6 lakh, only INR 5 lakh will be given and you have to arrange the rest on your own. 

Premium 

This is the amount of money that the party/policyholder availing the insurance has to pay periodically. Paying this amount in the stipulated time ensures that they will receive health insurance benefits. This periodic payment is what the money is sourced during a health emergency. 

So, this premium might be paid annually, monthly, or quarterly depending on the kind of health insurance plan that is being considered. There are also family floater health insurance plans that cover the needs of the entire family. Tax is often not counted for this premium value. The premium amount also depends on multiple factors such as income, age, and health of the insured person or persons.  

Comorbidities

Comorbidities mean the patient already suffers from some grave health issues like hypertension, diabetes, etc which are very common in people after a certain age. So naturally, they have a higher risk of getting involved in health crises that need surgery or hospitalization. Hence, health insurance plans for them often require higher premium value. 

Co-payment

As per this, the health insurance claims that in any case of a health crisis, the insurance provider alone will not be responsible for 100% of the treatment cost. The policyholder shares the load by opting to pay a desired percentage of the claim. 

Claim Settlement

Claim settlement refers to the process by which the insured has to submit the necessary documents to the health insurance provider to get the fees covered. The insurance company might get it covered with a cashless claim process. This occurs when the treatment is done in a cashless network hospital of the health insurance provider with whom they are tied up. However, in case that is not possible, if the insured shows the necessary bills that are covered by the health insurance claim, the company fully reimburses them.

Waiting Period

As the name suggests, the waiting period is a period of time during which the insured cannot claim any health insurance benefits. This varies from health insurance provider to provider. However, the minimum is one year. The time period begins right when you sign up for the policy. The idea behind this is that the health insurance provider has an idea of the medical history of the patient. 

It is also crucial because it may so happen that a person signs up for health insurance right before an expensive surgery. In that case, the sum insured will far surpass the premium if the insured cancels the health insurance plan after the surgery. So, to curb these, this method is followed. 

Read more - Waiting Period in Health Insurance

Critical Illness

So, these are extremely serious, often terminal diseases that ordinary health insurance plans do not cover. Every health insurance provider has different plans for these but they again vary from company to company. The content and extent of these critical illnesses are to be rigidly defined by the insurance provider and not the insured party. These generally include issues like cancer, kidney failures, major transplants, and so on.

The plans are different in these cases because most of these health insurance benefits assure a lump sum of money when the policyholder is found to be suffering from any of these diseases. 

Read more - Critical Illness Plan: Some Important Points to Consider

Deductibles

Deductibles basically refer to the amount of money that the insured has to pay every year to remain eligible for claiming health insurance. This means only when you pay this for expenditures related to health does the insurance provider start to pay. 

Exclusions

Exclusions, also called limitations, are the conditions that the particular health insurance plan does not cover. So, these will vary from plan to plan. When you sign up for health insurance claims, the company clearly mentions the exclusions. If claims are made for exclusions, they are immediately rejected. So, going through the policy before signing up for it is extremely important.

Inclusions

So, just like the exclusions, the health insurance plans also clearly mention the inclusions or those that the plan will cover. This becomes particularly important to know so that in case there is a legal battle with the provider over expenses, you know what you are doing. Moreover, knowledge of these is also crucial so that you do not end up paying more unnecessarily.

No Claim Bonus

No Claim Bonus (NCB) is a special bonus given to those who pay the premium for health insurance claims but do not need them as such. Therefore, for every claim-free year, these insured parties receive a bonus or a certain amount of money as a reward. This is because the insurance company did not pay for any health crises that the party had to undergo. Moreover, it is a great incentive to stay hale and hearty.

Read more - Important Things to Know About No Claim Bonus in Health Insurance

Final Take

The above are some of the most basic health insurance jargons which are crucial to avail of health insurance benefits in the hour of need without wasting time in confusion. There are many such which should also be known for patients with critical illnesses who continuously take help of these benefits. Knowing the jargon beforehand saves a lot of time and labour during a crisis when you will hardly be in a position to study these.