Common Health Insurance Terms

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Take a look at some of the most common health insurance terms that you may come across:

AYUSH Treatment AYUSH treatment refers to medical treatments taken through Ayurveda, Yoga & Naturopathy, Unani, Siddha and Homeopathy system of medicines. Several health insurance plans cover AYUSH treatment costs.
Bariatric Surgery Bariatric surgery or weight-loss surgery refers to the surgery performed to treat obesity or reduce the weight of a person. A lot of health insurance policies offer coverage for bariatric surgery.
Claim Claim refers to the request made to the insurance company by the policyholder to pay the medical expenses incurred on an illness or hospitalization under the health insurance policy. In the absence of a claim, you will have to pay for the medical expenses on your own.
Co-payment Co-payment refers to a fixed percentage of the claim amount that the policyholder has to pay at the time of claim settlement. Opting for a co-payment can help to reduce your premium amount.
Coverage Coverage refers to the extent of benefits available under a health insurance policy. The wider is the coverage, the more will be the benefits offered under the policy.
Cumulative Bonus Cumulative bonus refers to an increase in the sum insured amount without a hike in premium as a reward for not raising a claim in the previous policy year.
Day Care Procedures Day care procedures refer to those medical procedures and surgeries that are performed using advanced medical technology and require hospitalization of less than 24 hours. Almost all basic health insurance plans offer coverage for day care procedures. For example, cataract surgery.
Deductible Deductible refers to a fixed amount that the policyholder agrees to pay towards the incurred medical expenses before raising a claim with the insurance company. It is a part of the total claim amount. Once the deductible is paid, the insurance company will pay for the remaining medical expenses claimed by the policyholder.
Dependent Dependent refers to the family members of the policyholder who can also be covered under the same health insurance policy. It usually includes your legally wedded spouse, children, parents and parents-in-law..
Domiciliary Treatment Domiciliary treatment refers to the medical treatment taken at home under the supervision of a medical professional in case hospital admission is not possible. This treatment is covered by health insurance plans under domiciliary hospitalization.
Entry Age Entry age refers to the age at which a person can buy a health insurance policy. Most health insurance plans come with an entry age of 91 days to 65 years.
Exclusions Exclusions refer to the conditions or circumstances that are not covered under a health insurance policy. Any claim arising out of an excluded medical expense or circumstance is not payable by the insurance company.
Family Floater Family floater refers to the type of coverage where a single sum insured amount is shared by all the insured family members on a floater basis. A family floater policy is more affordable than buying an individual policy for each family member.
Free Look Period Free look period refers to the first 30 days of buying the policy, where the policyholder can change the insurance company or cancel the policy without paying any cancellation fee. If the policy is cancelled during this period, then the premium amount is refunded to the policyholder.
Grace Period Grace period refers to a fixed period that begins after the due date of a health policy. During this period, the policyholder can pay the due premium amount without losing the continuity benefits, such as waiting periods. Grace periods are usually of 15 days or 30 days.
Indemnity Plan An indemnity plan is a type of insurance policy where the claim amount is paid based on actual medical expenses incurred. Under this type of plan, the policyholder has to submit the medical bills to the insurance company so that they pay the claim amount equal to the total bill amount.
Insured Insured refers to the person who is eligible to receive medical coverage under a health insurance policy.
Insurer Insurer refers to the insurance company that is responsible to pay for the medical expenses of the insured under a health insurance policy.
Network Hospitals Network hospitals refer to the empanelled hospitals of the insurance company that offer the cashless hospitalization benefit to the policyholders. All insurance companies in India have a network of cashless hospitals.
No Claim Bonus No Claim Bonus is a renewal premium discount offered by insurance companies to policyholders for not raising a claim in the previous policy year. This discount can be accumulated up to 50% for five consecutive claim-free years.
Portability Portability refers to the procedure of changing the existing insurance company or health insurance policy without losing any continuity benefits like the waiting period. This facility is beneficial for people who are unhappy with their current insurer or policy.
Pre-existing Diseases Pre-existing diseases refer to the diseases or medical conditions that the applicant was diagnosed with up to 4 years before buying the health policy. Most health plans cover pre-existing diseases after 2 to 4 years of waiting period.
Premium Premium refers to the cost of an insurance policy. It is the amount paid by the policyholder at regular intervals to get insurance coverage and enjoy the benefits available under a health insurance policy.
Preventive Health Check-up Preventive Health Check-up Preventive Health Check-up refers to a series of medical tests that are undertaken to assess the health of a person and take suitable measures to prevent the occurrence of a disease.
Restoration Benefit Restoration benefit refers to the facility of refilling your sum insured amount before the policy renewal date in case the original amount gets exhausted on raising one or more claims.
Riders/ Add-on Covers Riders or add-on covers refer to the additional covers that the policyholder can buy on payment of an extra premium amount to expand the coverage of a basic health insurance policy. For example, PED waiting period reduction, etc.
Room Rent Limit Room rent limit refers to the limit up to which the insurance company will pay for the hospital room charges incurred by the policyholder. If the hospital room charges are more than the room rent limit, then the additional amount will have to be borne by the policyholder.
Sub-limits Sub-limits Sub-limits refer to the limit set on the coverage amount of a benefit under a health insurance policy. Eg: room rent limit. In case a coverage benefit comes with a sub-limit, the insurance company will only be liable to pay up to that limit, and any additional amount will have to be paid by the policyholder.
Sum Insured Sum insured refers to the maximum coverage amount that the insurance company will pay in a policy year. The sum insured is ascertained at the time of buying or renewing the policy.
Top Up Plan Top up plan refers to a type of health insurance plan that offers a higher sum insured and can be bought to enhance the medical coverage of a person. However, a deductible amount needs to be paid under all top up insurance plans, which makes its premium affordable.
Underwriting Underwriting refers to the process where an insurance company evaluates the application of a person. The underwriting team evaluates the medical history and personal details of a person to determine whether the policy should be issued and how much premium must be charged.
Waiting Period Waiting period refers to the time period from the commencement of the policy during which the policyholder is not allowed to make any claims. Any claims raised during this period will be rejected by the insurance company. For example, the PED waiting period, critical illnesses waiting period, etc.