Do you struggle to comprehend the language used in health insurance? Check out these eight definitions of jargon to help you understand family health insurance plans better. Everyone needs to have health insurance. However, every time you go to purchase an insurance policy, complicated words cause you to second-guess your decision.
Here are some of the most often used but perplexing terminology in health insurance that we have clarified just for you:
Prior to the insurance company beginning to cover you, you must spend this amount for healthcare.
Consider that your deductible is Rs. 10,000. The insurance only kicks in after that for expenses exceeding this amount. For instance, your health insurance will only cover Rs. 5,000 from a Rs. 15,000 hospitalisation expense. On the other hand, you would not be able to claim this amount if the bill had been for Rs. 9,000. While a low-deductible plan has higher premiums, a high-deductible plan will enable you to spend less each month. After all, a claim under a low deductible plan requires the insurer to pay a significant amount. You can use a health insurance premium calculator to calculate the cost of premiums. *
A lot of individuals confuse deductible with co-payment. Co-pay is a predetermined percentage amount that you pay each time you seek out certain healthcare services, as opposed to a deductible, which is an annual expense that is one-time. For instance, if your coverage has a 10% co-pay, you will be required to pay 10% of the total claim amount before the insurance company contributes its portion. This is more common in policies that provide coverage for any pre-existing conditions or for senior citizens. *
3. Waiting period
Even if you’ve heard of this phrase, you might not yet fully comprehend what it means. The waiting period is the length of time between when your policy is issued and when you can begin receiving benefits from your insurance. To put it another way, the insurance provider is now responsible for covering your claims for the sum insured.
4. Cooling off period
The minimal amount of time you have to terminate your policy is known as the cooling-off period. The 30-day cooling-off period begins on the insurance commencement date and lasts from there. If you decide to change your mind during this time, you can ask to have the policy cancelled.
5. Grace period
You must pay all premiums by the due date or earlier in order for a policy to continue in effect. However, there may be situations when you fail to make a payment. In such a situation, the majority of insurance firms offer a grace period of 15 to 30 days so that you can complete the payment and prevent the policy from expiring.
6. Agent vs broker
An agent sells or solicits insurance on behalf of a specific insurance firm. A broker, on the other hand, works on behalf of numerous companies and sells insurance for them all.
7. Super top-up vs. top-up plans
Top-up plans function as an extension of your current family health insurance plans. Mihir, for instance, has a Rs. 5 lakh insurance policy. If the threshold limit of Rs. 5 lakh is reached for a single claim, an additional top-up of “X” amount can cover him.
Similar in operation, but not limited to a single claim, are super top-ups. Instead, when the threshold level is achieved through numerous claims, they offer coverage. *
From all we’ve said, it’s clear that you must exercise caution before choosing a health insurance strategy. If you are unfamiliar with the jargon and specifics of a health insurance plan, it can be a difficult subject to understand. Hence this article will be of help to you.
* Standard T&C Apply
** Currently, there are 2 tax regimes in India – new and old. To get the tax benefit you desire, choose the correct one after consulting an expert. You can opt for a regime change during the next financial year.
# Visit the official website of IRDAI for further details.
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.