Commonly Used Terms and Phrases in the Health Insurance Sector

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Finalizing an insurance plan for your health is an important decision. This task can be simplified by learning more about the meaning of technical words and phrases that are used in connection with health coverage.

The process of seeking reimbursement of health expenses from the insurer according to the terms and conditions of the insurance contract.

Cashless Claims
Insurance companies have tie-ups and arrangements with hospitals where the policyholder need not pay cash for the treatment. Payment for treatment, subject to the coverage limit, is settled between the insurer and the hospital.

Co-payment or deductible refer to the policyholder’s share of the cost of treatment. This is normally determined as a percentage of the total claim amount.

Coverage Amount
Also known as the sum insured and sum assured, this is the maximum amount up to which the policyholder can claim reimbursement of medical expenses from the insurance company.

Critical Illness Cover
This policy offers a lump sum payment to the holder if he or she is diagnosed with pre-determined terminal diseases.

Cumulative Bonus
This is similar to the no claim bonus available to car insurance policyholders. Instead of a reduction in the premium, the policyholder enjoys an increase in sum insured without having to pay more. The bonus is restricted to a fixed percentage of the sum insured.

Disability Cover
This insurance policy provides assured monthly income to the policyholder if he or she suffers from partial or total disability caused by an illness or injury.

Permanent Exclusions
Certain diseases, conditions, and procedures are permanently excluded from insurance coverage. HIV/AIDS and cosmetic surgeries are never covered under health insurance.

Temporary Exclusions
Insurers exclude coverage for certain conditions and diseases for a temporary period after the policy comes into force. The policyholder can seek reimbursement of expenses incurred on such conditions only after the exclusion period ends.

Family Floater Policy
Instead of purchasing individual health insurance policies for each family member, one can opt for comprehensive policy for a single amount. A family health plan for Rs. 5 lakhs will allow any or all the family members to seek reimbursement of medical expenses provided the total claim does exceed the sum insured. This option is popular since it is rare for all members of the family to fall ill together in a single year.

Group Health Insurance
Under this policy, the individual enjoys coverage by virtue of being a member of a group. E.g. an employee of a firm.

The Insurance Regulatory and Development Authority is the statutory body governing and regulating the insurance industry in India.

Overseas Medical Policy
Similar to a standard plan, the only distinction in case of the OMP is that it provides coverage in a foreign country. This policy is ideal for those traveling abroad for work, tourism, or educational activities.

Personal Accident Insurance
These policies offer a fixed benefit in the event of death or disability arising out of an accident. The sum assured is paid irrespective of the actual expenses involved in the treatment.

This refers to switching of the insurance policy from one service provider to another. If all conditions and formalities are completed, then accrued benefits under the existing policy will be carried forward to the new policy.

Pre-Existing Condition
This refers to diseases, ailments, and conditions that the individual is already suffering at the time of purchase of the insurance policy.

Health insurance policies are normally valid for a period of 12 months. At the end of the validity period, the policyholder should renew the plan by paying the premium. Non-payment of renewal premium for 30 days of lapse of the policy will result in a break in insurance, which can affect portability.

Sub Limits
Apart from the sum assured, the policy may specify limits for certain costs like hospital room rent and ambulance charges. Reimbursement claim for such expenses cannot exceed these sub limits.

If you want to secure your family’s health through an effective insurance policy, then it imperative that you are aware of the meaning of important terms and phrases used by health insurance firms. Ignoring this may result in a situation where you fail to enjoy the benefits of the plan despite having paid the premium in full.

About HDFC Health:

HDFC Health is an initiative by HDFC Life, a life insurance company in India to help increase awareness, spread knowledge and enshroud myths surrounding the health insurance sector in India. As a wholly owned subsidiary of HDFC Life, HDFC Health offers health insurance policies in India that cover individual, family floater, critical illness and cancer care insurance plans

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