With the high expenses of hospitalization, treatments, and medicine, it only makes sense to protect yourself in every way possible by purchasing comprehensive health insurance. However, understanding key health insurance terms and conditions is essential to ensure that you get the most value for money and select the best coverage. If you are considering purchasing health insurance, you should know about the policy terms. You should be familiar with the words used in health insurance policies. Below is a list of five health insurance terms explained in detail.
This health insurance terminology is the period during which you cannot submit a claim under your health insurance coverage. The length of the waiting time differs from one insurance policy to the other. There are three types of waiting periods in general. The first is the first waiting period, during which if you require hospitalization within the first 30-90 days after purchasing the insurance, your claim will be denied unless it is due to an accident. However, this period might differ for different insurance companies. The second is the pre-existing illness waiting time. Before purchasing a health insurance plan, you must report any diseases you have been treated for or are currently under treatment. For pre-existing illnesses, there is a waiting time before your insurance would accept a claim. A premedical condition might have a one- to four-year waiting time.
The third type of waiting period pertains to certain medical conditions. The insurance sets a waiting period during which it will not consider a claim for specific diseases, often one to two years. Some types of health insurance policies only provide maternity benefits after a 9-36-month waiting period depending on the policy and the insurer.
A co-payment provision is present in specific plans. This health insurance terminology implies that you will be responsible for a portion of the claim amount if and when you submit a claim. Your out-of-pocket cost is generally represented as a percentage of the claim's total cost. For instance, if you make a claim for ₹20,000 and the co-payment condition is 10%, you'll have to pay ₹2,000 out of pocket. In most cases, insurers include a co-payment provision when the risk is significant, such as in a senior citizen's health insurance policy.
The deductible is a set amount of money that may be deducted from the claim amount, and only claims that exceed this amount become due. Simply defined, the deductible is the portion of your claim that is not covered by insurance. As a policyholder, you must pay this sum before your insurer steps in to cover losses. The amount of this health insurance terminology is generally determined at the time of insurance acquisition. The major purpose of deductibles is to prevent people from making trivial claims or going for unnecessary treatment and hospitalization just because they have insurance cover.
No-Claim Bonus (NCB)
These health insurance terms mean that insurers will offer you a cumulative bonus if you don't make any claims, commonly known as NCB. In most cases, your insurance coverage, or sum insured, is increased by 5% for each year you go without filing a claim, up to a maximum of 50%. The kind of NCB and the discount rate offered by each insurer are different. For example, several insurers now increase your sum covered by 100% rather than 50%. However, it's critical to understand the impact of a claim on your collected incentives, so inquire with your insurer.
Someone may have bought health insurance on the advice of a friend, only to find out later that the benefits and terms and conditions do not match their needs. It is when the free-look period comes in handy. The free-look time allows you to evaluate the insurance you've purchased and return it if it doesn't meet your needs within a certain number of days after purchasing your insurance.
Choose a health plan that protects you from a wide range of medical issues and read the health insurance terms and conditions properly. When purchasing health insurance for your family, be sure that the coverage fulfils the requirements of each family member. Consider your criteria, compare plans based on features and prices, and choose a plan that meets your needs. Bharti AXA offers the most acceptable health insurance coverage in India, with a variety of advantages. You and your family can be financially secure with their health insurance coverage.
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.