5 Must Know Terms in Health Insurance
Updated On Apr 26, 2021
Buying a health insurance policy has become mandatory these days. But the long list of terminologies are crucial for understanding the policy before you start investing. Unless a policyholder understands what the different terms imply and mean, they would not be able to effectively use the different benefits of the policy.
To ease your confusion and help you in making the right choice for a particular health insurance, let us look at some of the key health insurance terms that are indispensable for understanding this financial product. The following are a list of 5 must know terms in health insurance :
5 Must Know Terms in Health Insurance
1. Waiting Period
Most health insurance policies come with a waiting period and its duration varies from company to company. A waiting period is the time during which you cannot make any health claims and certain illnesses remain uncovered by your health policy. Usually, there are three kinds of waiting periods in health insurance. These are the initial waiting period, the waiting period for disclosing any pre-existing medical condition to the insurer and the waiting period for specific ailments. During the waiting period, your insurer is not bound to entertain any health claims made by you. While most insurance companies have a waiting period of 30 days, it can also range from a few months to a few years before all of your medical conditions are covered by the company.
2. Free-look period
People often buy health insurances based on the advice and suggestions of their friends and family without always understanding the benefits of the same. In such cases a free-look period becomes useful. All health insurances come with this feature that has a duration of 15 to 30 days, depending upon the online or offline mode of the policy. This option gives you the choice of returning the policy in case you are dissatisfied by the terms of the health insurance. An added bonus of this feature is, that once you return the policy, the amount of premiums paid by you from the beginning of the policy term till the day of return is refunded to you by the insurance company, after deducting applicable taxes and any medical expenses that might have been incurred by you.
3. Premium
This is the most important and basic term that you need to be familiar with before buying health insurance. A premium is the monthly charge or payment made by you to the insurance company in return of the health policy. It is dependent on several factors such as your age, medical conditions and type of employment. Most health insurances have different payment options for you to choose from to make the premium payment. It is often paid monthly, quarterly, half yearly or annually.
4. Co-Payment
When you are buying health insurance, you must bear in mind that not all expenses would be borne by the insurance company. While filing a health claim, a fraction of the payment has to be paid by you. This is known as co-payment where a certain percentage of the claim made towards the health insurance company is borne by the policyholder themselves.
5. Deductible
A deductible is the amount of money that you pay for health services before your policy comes into force. For example, if your health insurance policy has a deductible amount of INR 10,000 and you file a health claim if INR 35,000 then you would have to pay the deductible amount of INR 10,000. A company will only pay when the amount is over the deductible limit. You must be careful since this is an inbuilt clause for most insurance companies to prevent you from making small claims.
Insurances are tricky arenas of investment and getting to understand the terms and other conditions of the policy would contribute to understanding the plans better. These defined terms are most commonly and abundantly used in insurance policies and hopefully it will protect you against miscomprehension and allow you to choose the best health insurance suited for you and your family.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
