Common Health Insurance Terms You Should Know About:
1. Sum Insured:
Sum Assured is the maximum amount that your health insurance company is liable to pay for hospitalization. If the cost of your medical treatment exceeds the sum insured chosen by you, you will have to pay the amount in excess of the sum insured yourself. Thus, you should opt for health insurance plans with higher sum insured.
2. Pre-existing diseases:
If you are suffering from any disease before buying a health insurance policy, then that disease comes under the pre-exit disease category.
3. Waiting period :
This is the amount of time you need to wait for your health insurance policy before some or all of the coverage begins. For example, many health insurance policies have a certain waiting period before providing coverage for pre-existing diseases.
4. Sub-limits :
Sub-limits are limits that your health insurance provider imposes to limit the expenses they are required to pay for a particular condition. This is mainly done to reduce the cases of fraud claims. Most health insurance companies have sub-limits on room rent, common illnesses, pre-planned procedures, ambulance expenses, and doctor’s fees. The sub-limit can be a fixed percentage of the sum insured chosen by you or a fixed amount agreed between you and your health insurance company.
5. Co-payment :
Co-pay or co-pay is a fixed percentage of the claim amount that you need to pay for your health related expenses before your insurance company can pay it. The co-pay is decided by you when you buy or renew your health insurance policy. A higher co-pay can help you reduce your premium amount.
6. Deductible :
Deductible is the concept of cost sharing between you and your insurance company to pay for your health care expenses. This is a fixed amount that you have to pay every time you make a health insurance claim. High deductible health insurance plans can be beneficial for you, if you visit the doctor/hospital less frequently. Also, having a high deductible health insurance plan can help you reduce your premium amount.
7. Room rent limit :
The room rent limit is the maximum coverage that your health insurance policy provides for daily room charges in case of hospitalization.
8. Coinsurance :
If you have multiple health insurance policies, you can file a health insurance claim with all of them and you will be reimbursed the claim amount by all the health insurance companies as per the fixed percentage decided by you. This concept is called Coinsurance.
9. Free look period:
Health insurance companies give you a free look period of 15 days. During this period you can examine your health insurance policy and decide whether it is the best fit for you or not. If you feel that this is not an adequate medical insurance plan for you, you can cancel this medical insurance policy within 15 days. No cancellation charges will be applicable if you cancel the policy within 15 days. However, you will be charged a premium for the number of days it takes to make the decision.
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10. Grace period:
After your health insurance policy expires, you have 30 days to renew your health insurance policy. This 30 day period is the grace period. If you renew your policy in these 30 days, you will get restored to your health insurance policy benefits like waiting period, coverage for pre-existing diseases etc. But, you will not be covered for any claim made by you during the grace period.