It is said that health is the most important aspect of a person’s life. Health is wealth. And to protect this wealth you need financial backup. This backup is provided by health insurance and to be honest it is slightly complicated.
Health insurance gets complicated thanks to some words that a person may not have heard before. In this article, we have explained the meaning of such words that you may have read but didn’t quite understand when you came across health insurance. Let’s get started:
#1 Sum Insured
Sum insured is referred to an amount of money to be paid by the insurance company in case of an unfortunate event. This is the maximum amount your insurer is liable to pay when you raise a claim. Any expenses that exceed the amount of sum insured are to be borne by the policyholder. The premium of your health insurance policy may roughly depend upon the amount of sum insured you choose to receive.
A nominee is a person who will receive the proceeds of the policy in a situation where the policyholder suffers death. With respect to health insurance, a nominee may not receive the proceeds in case of a cashless claim, however, all the proceedings will be sent to the nominee if it is a reimbursement claim. Do not confuse a nominee with a beneficiary. A beneficiary is the legal heir of the deceased whereas a nominee will be responsible for managing or sending the proceeds of the policy to the beneficiary if both are not the same person.
A deductible is a small portion of the claim amount that is to be borne by the policyholder. One needs to pay the deductible amount upfront in case of a cashless claim whereas this amount will be subtracted from the final claim amount in case of a reimbursement claim. The idea of applying a deductible amount is to encourage avoiding claims for smaller events.
#4 Pre-existing disease
As the name suggests, a pre-existing disease is a condition suffered by the policyholder before buying health insurance plans. Common pre-existing diseases are diabetes, cataract, high-blood pressure, asthma, etc. One needs to declare all the pre-existing diseases honestly to his/her insurance company. Thus, if the insurer allows, one can get coverage for a pre-existing disease as well.
#5 Waiting Period
This is the time when a policyholder cannot raise a claim. A waiting period is usually applied to pre-existing diseases, maternity benefit, etc. A waiting period can range from a few months to a few years. Thus, it is suggested to buy a health insurance policy as early in life as possible.
#6 Maternity Benefit
Expenses related to pregnancy are called maternity benefits. This could include pre-natal, post-natal expenses and medical insurance coverage for the newborn baby. Most health insurance companies impose a waiting period for availing maternity benefits that can range from 9 to 48 months. Thus, it is advised to buy a Maternity health insurance cover for a newly-married couple as soon as possible.
TPA stands for Third Party Administrator, they are professional agencies that are responsible for coordinating and managing a health insurance claims and other related services. A policyholder needs to get in touch with the TPA (usually present in the hospital premises) in order to begin with the claim process. TPA is a link between the insured and the insurer.
Inclusions/coverage is the situation in which a policyholder will be allowed to raise a claim. One should buy a policy keeping in mind the availability of coverages. With respect to health insurance, bed charges, doctor visit, nurse charges, etc. are common coverages.
Exclusions are situations that are not covered by your health insurance policy. Exclusion is an antonym for inclusion. These situations are explicitly mentioned in health insurance plans. When a claim is raised against exclusions, the insurance company will most likely reject it.
#10 Family Floater, Group Health Insurance, Individual Plan
These are different types of health insurance policies available in India. Let’s take a look at what each of these terms mean:
Family floater plan: As the name suggests, this plan can be bought by the members of a family related by blood or by law. The sum insured is shared by all the members of the family. These plans are not very extensive in nature.
Group health Insurance: Employee medical insurance is the best example of a group health insurance plan. The sum insured is not necessarily shared among the members. There can be a fixed amount of sum insured allotted to each member of group health insurance.
Individual Plan: These plans are extensive in nature and can be bought to suit the needs of an individual policyholder. The sum insured is meant only for the policyholder.
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