Important jargons you should know before buying Health Insurance
Good Health is the most valuable asset to have, and anything valuable requires protection. Health insurance policies have become a fundamental necessity for people wanting to ensure a burden-free financial future for themselves and their family. In 2020 alone, over 500 million Indians were covered under various health insurance policies, ensuring they cover the medical expenses arising out of an unfortunate eventuality.
If you are not a part of the 500 million people and are new to the insurance spectrum, there are certain necessary jargon you should know about before buying an insurance policy. These will allow you to find the most suitable policy and ensure that you make an informed decision.
Things you must know before buying a health insurance policy
Here are essential jargons you should know before buying a health insurance policy:
Sum Assured:
Sum assured is a predetermined amount that the insurance company pays to the policyholder if the insured event takes place. For example, in the case of a policyholder’s demise, the insurance company will pay the sum assured amount if the policy terms apply.
Eligibility:
Eligibility is the minimum requirements needed on the policyholder’s part to buy the insurance policies. The insurance company can ensure eligibility through minimum entry age criteria, medical condition, legality and finances.
Premium Amount:
Insurance companies charge a certain amount, called the premium amount, from the policyholder in exchange for providing health insurance coverage. The amount is pre-determined based on the sum assured amount and the features of the health insurance policy.
No Claim Bonus:
The insurance company offers a discount on the premium to the policyholders for every year they did not file an insurance claim or the insurance company increases the sum assured at the time of subsequent policy renewal.
Co-Payment:
Co-payment is a term used to define the condition where the policyholder bears a percentage of the total expenditure, and the insurance company pays the remaining amount. The higher the Co-payment percentage, the more expenses the policyholder covers from his/her own pocket.
Waiting Period:
The waiting period is a predetermined period during which the insurance policy does not entertain any claims arising from a pre-existing disease or illness. Once this period is over, the policyholder can make any claims specified in the policy.
Network hospitals:
Network hospitals are those hospitals that are enlisted by the insurance company in the health insurance policy to avail of cashless treatment. Outside the network hospital, the policyholder has to pay before getting reimbursement from the insurance company.
Cashless Facility:
The policyholder can avail of cashless treatment in in-network hospitals where the insurance company directly settles the claimed medical bills with the hospital. In the cashless facility, the policyholder pays no physical cash to the hospital.
Grace Period:
The insurance company provides a grace period of 15 days as an extension if the policyholder forgets to pay the premium instalment before the due payment date.
Add-ons:
Add-ons are additional insurance covers that the policyholder can add to the existing insurance policy to make it more suitable. By paying a little extra premium, the policyholder can add riders such as accidental hospital cash benefit, critical illness rider etc.
Top-ups:
A top-up is an extension to the existing health insurance policy to increase its deductible (the amount you can claim as reimbursement). When added, top-up plans provide the facility to claim additional amounts over and above the sum assured of the base policy.
Portability:
Insurance companies provide a portability feature for switching from one policy to another of the same insurance company or from one insurance company to another. The feature transfers all the credit from the previous to the switched policy.
Understanding the health insurance jargon is one of the most important steps before buying an ideal health insurance policy. Another one is to consult an experienced and quality insurance broker. PINC Insurance is a one-stop solution to consult with insurance experts and buy the most suitable health insurance policy. You can visit PINC Insurance to know everything about health insurance policies and how to buy the most comprehensive one for yourself and your family.