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Health Insurance Glossary: Learn Terms and Terminologies

Team AckoJul 22, 2021

While buying a new health insurance policy or while making changes to the features of the healthcare plan, understanding the terms and definitions associated with health insurance can be challenging. This Health Insurance Glossary will help you understand the terminologies so that you can make the right decision before buying a health insurance plan that meets your requirements.

Glossary of Health Insurance in India

Glossary of Health Insurance in India: Terminologies Explained (A to Z Definitions)

Mentioned below are common health insurance terms used in India along with their explanation.

List of Basic Glossary Terms and Terminologies Used in Health Insurance:

A

Age Limit 

The age at which a person is allowed to apply for a health insurance plan or renew a policy.

Agent

Persons who act as a link between the insurance company and the customers. They help customers to understand the features and benefits of a plan as well as renew the policy or raise a claim against the policy.

Accident

An unforeseen, sudden and involuntary event that causes financial loss to the policyholder.

Annual Renewal Date

The date by when the policyholder needs to renew their health insurance policy.

Any One Illness

A continuous period of a specific illness that relapses within 45 days from the last date of consultation with the respective hospital or nursing home.

AYUSH Treatment

The full form of AYUSH is Ayurveda, Yoga, Unani, Siddha and Homeopathy (referred to as alternative medicine treatment). Some health insurance policies provide coverage for such treatments.

Ambulance Cover

Coverage of ambulance charges for transportation to the hospital.

Accumulation Period

A period during which any medical expenses incurred by the policyholder will be adjusted towards applicable health insurance deductible. Only after the deductible is satisfied, the insurer will begin covering the medical costs of the policyholder and the beneficiaries.

Add-on Covers

Add-ons are small packages that enhance the coverage of the standard policy for a slightly higher premium. They offer additional financial protection against specific medical treatments with high medical costs. Some of the add-ons provide exclusive coverage for maternity, critical illness, hospital cash benefit, etc.

Automatic Restoration

Some policies provide the benefit of the restoration of the sum insured in case it is exhausted. It gets automatically restored for the next hospitalization.

B

Benefit

Any benefit declared in the Policy Schedule or Certificate of Insurance is referred to as ‘Benefit’.

Beneficiary

The policyholder and the person named in the Certificate of Insurance who receives benefits of the policy in case of death of the primary policyholder or a policyholder who receives benefits of the policy is known as a beneficiary.

Bodily Injury

Refers to the physical injury caused to the beneficiary’s body such as cuts, bruises, abrasions, etc.

Broker

It refers to the person or company who forms the link between the insurer and the policyholder. Unlike an agent, a broker is not employed by the insurer.

C

Cashless Facility/Hospitalization

A facility provided by the insurer to the insured where the payment of the medical bills is directly paid by the insurer to the network provider or hospital.

Claim

A formal request by the insured to the insurance company asking for the payment or compensation of the medical costs based on the benefits of the insurance policy.

Claim Settlement

A process through which the insurer pays for the medical bills that have been claimed by the policyholder. Claims can either be settled through the cashless claims process or the reimbursement process.

Claim Settlement Ratio

A metric for gauging an insurance company’s ability to settle health insurance claims against the number of health insurance claims it receives during an entire financial year. It also includes any pending claims from the previous year.

Co-Pay or Co-Payment

A cost-sharing agreement between the insurance company and the policyholder. It states that the policyholder will bear a part of the claim amount.

Also, read: Copay in Health Insurance

Comorbidities/Pre-Existing Diseases

When two or more illnesses or diseases coexist in a patient or additional conditions or diseases often co-occurring with a primary condition is known as comorbidities. 

Critical Illness

Refers to an illness, disease or sickness that is critical. Examples of critical illnesses are kidney failure, cancer, heart attack, bypass surgery, etc. Some insurers offer add-ons on critical illnesses along with the standard health insurance plans.

Cashless Claims/Treatment

A hassle-free and paperless method of payment of medical bills to the network hospital. The insurer will settle the claim or medical bills directly with the hospital or third-party administrator. This process of claim is referred to as cashless claims since the policyholder does not have to pay the bill except mentioned in the terms and conditions.

Cumulative Bonus

Refers to the bonus provided by the insurer to the policyholder for not raising a claim during the policy period. The bonus can be between 5% to 10% and can go up to 50% of the sum insured.

Coverage Period

The period between the commencement date and the expiration date of the insurance policy, during which the policyholder is eligible for the benefits of the insurance plan is referred to as the coverage period.

Convalescence Benefit

A cash benefit to the policyholder during the recovery period in the hospital. This is provided in case the patient needs to stay in the hospital for a prolonged period of time. It is offered in the form of a lump-sum payment that is pre-defined in the policy schedule.

D

Deductible

A fixed amount that the policyholder has to pay every year to raise a claim against the policy. For example, if the deductible is Rs. 20,000, the insurer will cover your medical expenses after you bear the cost of the medical bill of up to Rs. 20,000.

Dependents:

Dependents can be any family members for whom the policyholder is willing to assume medical coverage. Dependents include spouse, children and parents/parents-in-law.

Daily Hospital Cash

A benefit offered in some of the insurance policies that provide a fixed cash payment to the policyholder for each day of hospitalization. It is a cash benefit for meeting additional expenses otherwise not covered by the health insurance or for compensating the loss of income during the hospitalization period. You can purchase it as an add-on or bundle it with the standard plan.

Domiciliary Hospitalization

Medical treatment received by the policyholder at their home is referred to as domiciliary hospitalization.

E

Eligibility

It means the required conditions or criteria that the person should qualify to apply for a health insurance policy.

Exclusions

Any conditions, illness, disease or sickness that the insurance policy does not cover is considered as an exclusion from the policy coverage. It is important to check the list of exclusions before you choose the right plan.

Emergency Care

Any hospitalization that is required due to sudden or unforeseen emergencies is categorized as emergency care.

F

First Diagnosis

The first recorded medical diagnosis of an illness or disease or condition is referred to as “First Diagnosis”.

Family Floater Policies

A single health insurance policy that covers more than one beneficiary is referred to as a Family Floater Policies. It typically includes the policyholder and their dependents such as spouse, children and parents/parents-in-law.

Free Look Period

A free look period is a period of time in which a policyholder can terminate the policy without penalties. Insurers provide this feature without any penalties and the period can range up to 15 days.

G

Grace Period

A special or extended period after the expiry of the due date to pay the renewal premium of the plan. During this period, until the policy is renewed, there is no health insurance coverage; however, the existing policy benefits remain active. Typically, the grace period can vary between 15 and 30 days.

H

Hospitalization

It means admission to the hospital for a minimum period of 24 hours. This criterion is applicable for both planned and unplanned hospitalization.

Home Nursing

A nursing speciality in which nurses provide home care to patients who have undergone treatment in a hospital. The services are provided after the recommendation of the medical practitioner and specialist.

I

Illness

It means sickness or a pathological condition or disease leading to the disruption of the normal physiological functions and requires medical treatment.

  • Acute Condition: An illness or injury that responds quickly to treatment which leads to full recovery.

  • Chronic Condition: A disease or illness or injury that needs long-term or ongoing treatment, relief from symptoms or requires rehabilitation or is recurring is referred to as a chronic condition.

Insurer

The insurance provider that takes care of financial assistance for the medical treatment of the policyholder and its beneficiaries.

Insured/Insured Person

The beneficiary of the insurance policy and/or the dependent family members named in the policy schedule is known as the insured or the insured person.

In-Patient Treatment

A treatment that requires the patient to be hospitalized for a minimum period of 24 hours for a treatment that is covered in the policy.

ICU Charge or Room Rent

The charge for the use of the Intensive Care Unit room by the policyholder or the beneficiary of the policy.

Individual Health Insurance

A health insurance policy that covers a single individual for planned and unplanned hospitalization.

IRDAI

The full form of IRDAI is the Insurance Regulatory and Development Authority of India, which is the apex body or the regulator of the insurance sector or industry in India.

L

Lapse

When the insurance policy terminates or expires due to lack of premium payment is referred to as lapse.

Long-Term Care Policy

A policy that covers specified treatment for a specified duration such as nursing care, home nursing and custodial care is referred to as a long-term policy.

M

Maternity Cover

The insured can avail of financial assistance for the medical expenses incurred on child delivery. It includes coverage for medical expenses related to child delivery (normal and cesarean), pre and post-natal costs, etc.

N

Network Provider/Hospital

A hospital or nursing home or healthcare provider listed by the insurance company to provide medical treatment to the insured through the cashless facility or hospitalization.

Non-Network Provider/Hospital

A hospital or nursing home or healthcare provider not listed by the insurance company or is not part of the insurer’s network of hospitals.

Nominee

A person nominated by the primary policyholder to receive the benefits of the policy based on the terms and conditions of the policy.

No Claim Bonus (NCB)

The NCB is a benefit or discount provided by the insurance company to the policyholder for not raising any claims during the period. This bonus is offered in the form of a higher sum insured for the same premium amount.

O

Out-Patient Department (OPD)/Treatment

A treatment that requires less than 24 hours and does not require hospitalization is referred to as out-patient treatment. The person receiving the treatment is known as out-patient, and the department providing this service is known as the out-patient department or OPD.

P

Primary Insured

The person applying for the insurance policy and pays the premium for the coverage is known as the primary insured.

Policy Period

The time frame between the commencement date and the expiration date of the insurance policy is known as the policy period.

Premium

An amount the policyholder pays to the insurance company to avail of health insurance coverage. Typically, the premium is paid on an annual basis.

Pre and Post-Hospitalization Expenses

Medical expenses arising before and after the hospitalization of the insured person are known as pre and post-hospital expenses.

Portability

The process of transferring the health insurance policy from one health insurance company to another or from one plan to another is known as portability.

Private Room

It means a single occupancy room in a private hospital.

Personal Accident Cover

A fixed benefit plan that offers a one-time payment of the amount specified in case of accidental death or disability. It does not cover medical costs incurred by the insured but pays a lump sum amount to the policyholder.

R

Renewal

An act of extending the period of validity of the health insurance policy for another period by paying the required premium on or before the renewal date.

Reimbursement

When the policyholder avails medical treatment at a non-network hospital, they can recover the medical expenses by requesting the insurance company to reimburse the costs. This process of settling claims by the insurer is known as reimbursement claims.

Restoration Benefit

In case the sum insured is exhausted, through the benefit, the insurer will recharge or re-fill the sum insured.

Room Rent

A charge towards the use of the room in the hospital or nursing home. Usually, there is a cap on the room rent specified in the policy schedule.

S

Sum Insured

The maximum payable amount specified in the insurance policy. The policyholder cannot raise a claim over and above the sum insured. The premium of the policy is calculated based on the sum insured.

Survival Period

A period during which the policyholder or beneficiary of the insurance policy should survive after they are diagnosed with a covered sickness, condition or illness.

Sub-Limit

An additional limit set by the insurance company for specific medical care. The treatment of such illnesses cannot exceed the specified sub-limit. Sub-limits are typically placed on room rent, doctor’s consultation fee, ambulance charges and pre-planned medical treatments such as cataract operation, plastic surgery, etc. 

T

Third-Party Administrator (TPA)

Those authorized by the insurance provider to offer administrative services to customers or policyholders are referred to as Third-Party Administrator or TPA. Their primary role is to process claims, settle claims, collect premiums, etc.

Terminal Illness

Those illnesses or conditions or diseases which cannot be treated or cured is known as a terminal illness. Some of the examples include heart ailments, last-stage cancer, etc.

Top-up Plans

These are plans that can be bought along with the standard health insurance plan. After the sum insured of the standard plan is exhausted, the top-up plan will cover the medical costs.

W

Waiting Period

The period during which some of the benefits of the policy will not be available to the insured. Typically, this fixed period commences from the start date of the policy. Upon expiration, the insured can claim the benefits of the policy. Pre-existing diseases or conditions or illnesses have a waiting period of approximately up to 4 years depending upon the type of insurance policy.

Group Health Insurance Policy Terminologies

Mentioned below are terminologies associated with the Group Health Insurance Policy.

GMC

It's the full form of Group Medical Coverage, which is another term for group health insurance or corporate health insurance or employee health insurance.

Group

Several people that are covered under a single health insurance plan are known as a group. A group in Group Health Insurance is defined as either employer-employee or non-employer-employee. Groups such as cultural or social associations can also be categorized as groups to apply for the GMC.

Coverage

It refers to the inclusions specified in the insurance policy to meet the liabilities of the policyholder or the group.

Master Policyholder

The manager/leader/representative of the group who receives the Certificate of Insurance.

Eligibility Date

Refers to the date from which the member of the group begins to benefit from the Group Medical Coverage.

Effective Date

Refers to the date from which the policy becomes active and the insured can start enjoying the benefits of the policy.

Employee

A person employed for salary or wages and is typically a full-time employee who could be eligible for Group Health Insurance.

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