Sometimes people find the insurance jargons confusing. It is important to understand these terms along with the conditions to know about the policy in a better way. Following is the guide to understanding different terms associated with health insurance policies.
Term 1 – Co-Payment
As per the contract between the insured and insurance company, the amount incurred during hospitalization is reimbursed by the health insurance plan. Co-payment is the case where the insured agrees to pay a certain percentage of the total bill. To charge a lesser premium to the insurer, most plans provide the option for co-payment. This feature is common in senior citizen health insurance. As the premiums are higher for seniors, co-payments help to lower the burden of a customer.
Term 2 – Deductible
The only difference between co-payment and deductible is, in co-payment the insured pays a certain amount of the hospital bill, while in deductible the insured agrees upon to a fixed amount to pay. There are two types, Voluntary and Compulsory Deductible. The compulsory deductible is fixed and pre-decided by the insurance company, and it is compulsory for the insured to pay. As per the affordability, the insured can decide the amount in voluntary deductible. As per the rules, the deductible has to be paid before the insurer pays for the claims.
Term 3 – Portability
Sometimes, you might not find the existing health insurance adequate in terms of your requirements. Because of this if you stop paying the premium or buy a new policy, you may lose on certain benefits such as the served waiting period for specific illness or accumulated NCB. To cover pre-existing or specific illness, most of the health insurance plans come with a waiting period. Portability allows you to switch the policy without losing the accumulated credits or benefits of the existing policy. It has one condition,which is that there should be no break in premium payment.
Term 4 – Maternity
With a pre-defined waiting period comes the maternity clause. Some insurance companies offer maternity benefit as an in-built feature, even when in most of the cases it is excluded. A higher premium is charged for the plans with a lesser waiting period.
Term 5 – Pre-Existing Disease
Any health condition that is prevailing before you buy health insurance is the Pre-existing illness. Nowadays you do not have to worry before taking health insurance with pre-existing illnesses. As the insurance companies extend coverage even to those with pre-existing ailments as well. There is only one condition in this feature. One has to serve a waiting period of specific years and the policy must be renewed continuously. Always make it a point to inform the insurance provider regarding any pre-existing illnesses before you purchase the policy.
Term 6 – Free Look Period
It is not mandatory to stay with the same insurance company once you have bought the policy. There are many situations when you might not feel the policy suitable for your requirements. Most of the insurance company offers a feature of a free-look period of 15 days, which allows the insured to return the policy. However, it is only applicable in the initial policy year, and it begins from the date of receiving the policy.
Term 7 – Grace Period
It is a specific period offered to the insured to pay the premiums in case if he/she decide to renew the policy before the due date. Usually it is 30 days; however, it may differ along with insurance companies.
Always ask the insurer if you stumble on something you do not understand,resolve these doubts to know your policy better. Explore plans such as critical illness insurance or plans for individuals and choose the policy that meets your requirements.
