This is Sania’s story, but it could be anyone of us in her place. Sania needed hospitalization and was advised complete rest. However, she could not rest in spite of having a good health insurance policy. Why? She was clueless when she was asked to pay a percentage of her bill. Instead of taking the much-needed rest she stressed herself by worrying about the payment. The hospital authorities were simply asking for co-payment that was to be paid while availing treatment. The misunderstanding was a clear reflection of the situation: ‘She had not understood the terms of the policy she had bought.’
Currently, the insurance product arena is distinctly rich and varied with diverse products; catering to the various needs of the people in different walks of life. And this is unavoidable considering the upswing in the number of insurance users and providers in today’s modern digital India. The only flip side to this is that we have to deal with various insurance terms or the“insurance jargon” as we step out to buy a policy.
Here are some commonly used terms we come across while looking at the features of a policy.
Insurance Certificate/ Policy : This is a contract document which carries all the features of the coverage provided by the company to the certificate/policy holder. This gives information about the costs that are covered as well as the ones that are not covered.
Claim: This is a request that is sent or filed by the policyholder to the insurance company in order to pay for the treatment received by him.
Insurer: This is thehealth insurance provider, usually an insurance company, who issues the policy/plan to an individual.Insurer is responsible for the payment of expenses in case of a claim.
Assignee or Named Insured: Particularly, this is the named individual or firm or the policyholder with whom an insurance contract is made. He is the one who gets the benefits under the policy. In some cases, more than one person/entity may be referred as named insureds.
Sum Insured: The maximum amount that the insurer has agreed and liable to pay in case of a medical eventuality of the insured is referred to as the sum insured.
For example, if the sum insured is Rs 3 lakhs, and the policyholder gets hospitalized.The costs add up to Rs 5 lakhs, the insurer is liable to pay him only Rs 3 lakh, that is the sum insured.
Premium:The monthly payment that is made in the name of the insured either by himself or his employer to the insurer in exchange of protecting him from the risk or liability of medical bills in case of medical treatment.
Co-payment, Co-insurance and Deductible: These are the terms which represent a certain out-of-pocket payments when a claim is processed.
Co-payment in Health Insurance is basically a fixed flat fee that is paid by the assignee or the policy holder whenever he claims health insurance from the provider. However, there could be other clauses regarding co-payment which need to be considered in order to understand the full impact of the co-payment feature in a plan.
Co-insurance in Health Insurance, on the other hand, is a percentage of the total costs paid by the policy holder or the insured associated with a claim.It is generally mentioned as a percentage of the total amount, for example, 10% or 20% of the claim.
In India, co-payment and coinsurance are sometimes used interchangeably. Hence one needs to be aware of the exact features before buying a particular plan. Co-payment or co-insurance feature certainly reduces the premium since the risk or liability is shared by both, the insurer and the policy holder.
Deductible in Health Insurance is the amount that is borne by the insured before the insurance claim comes into effect. Deductible is expressed as a fixed amount or a certain percentage of the claim amount. Bigger deductibles lead to a lower premium.
Exclusions: These refer to those situations or conditions which are not covered by the health plan or in other words, the insured will not receive any benefit for the same.
Waiting period for Pre-existing Conditions: A medical condition which is excluded or not taken into account for Insurance claim settlement since it was present at the time of purchase of a plan is referred as a pre-existing condition in health insurance domain. Most insurers cover such medical conditions after a certain waiting period which is anything between 2-4 years. Thus, waiting period is defined as the time till which the pre-existing diseases are not covered under aHealth Insurance plan.
That is all for today. We hope the above write-up will help you understand the different terms and clauses in your health insurance plan and make an informed decision of buying a right health Insurance planfor yourself and your family.
Please contact Quickinsure if you have any query or need further explanation.