Important health insurance terminologies and their benefits

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25 Jul 2023

Learn about important health insurance terminologies & their benefits. Understand the policy terms to make informed decisions with Kotak General Insurance today!

When it comes to navigating the world of health insurance, there are many health insurance terminologies that can be confusing and overwhelming. Understanding the health insurance terminologies can make choosing a health insurance policy and navigating the healthcare system much easier. In this article, we will explore some of the key terms and terminologies used in health insurance to help you make informed decisions about your health insurance plan.

1. Premium
A premium is the sum of money you must pay the health insurance provider in exchange for the selected coverage. The higher the sum insured you pick, the higher the premium you’ll have to pay.

2. Sum insured
Sum insured refers to the policy's coverage amount. The amount is equivalent to the maximum amount that would be paid by the insurer in case of hospitalisation.

3. Deductibles
Deductibles can help you reduce your policy premium, but at the same time, it can also mean that you have to pay a fixed sum at the time of the insurance claim.

4. Co-payment
The amount that the policyholder must pay to the insurance company before obtaining the medical service is referred to as the co-payment or co-pay clause.

5. Add-on covers
Add-on covers are extra components of health insurance that provide further financial protection against unanticipated medical emergencies with greater medical expenditures. You can choose additional benefits like maternity coverage, hospital cash benefits, and critical illness coverage to enhance your health insurance plan.

6. Critical illness
Critical illness refers to life-threatening diseases like cancer, cardiovascular diseases, stroke, etc. These illnesses are usually covered by specific health insurance plans and may also be covered via add-ons.

7. Waiting period
The waiting period in health insurance refers to the predetermined time frame before which you are not eligible to receive the advantages of the coverage you chose. You can't file health insurance claims during the waiting period. The length of the waiting period is determined by your health conditions and the type of coverage you have purchased.

8. No claim bonus
No claim bonus (NCB) is one of the health insurance benefits which rewards the policyholder for not making a claim in a policy year.

9. Network hospitals
The hospitals that are linked with an insurer are referred to as network hospitals. You can receive treatment at these hospitals without having to worry about paying the bills because the insurer will pay the amount in full, up to the coverage limit.

10. Inclusions
Inclusions are policy benefits and features for which the insurer will pay, for example, hospitalisation costs, room rent, doctor’s fees, ambulance charges, etc.

11. Exclusions
Exclusions refer to a health insurance policy's restrictions. These are the circumstances and events that can cause your health insurance claims to be denied.

12. Pre-existing diseases or comorbidities
A pre-existing condition is a medical condition that you have before purchasing a new health insurance policy Examples of pre-existing medical illnesses may include cancer, diabetes, asthma, and thyroid.

13. Cashless claims
The health insurance claim filed for a medical treatment availed in the network hospitals is called a cashless claim. The bills are settled by the insurance company directly.

14. Claim settlement ratio
It is a metric that denotes the number of insurance claims settled over the course of a fiscal year by an insurance company in comparison to the total claims received.

15. Automatic restoration
This refers to a feature in most health insurance plans where the sum insured gets restored if the entire sum insured is exhausted.

Understanding these terms will make it easier for you to choose the right health insurance policy that suits your needs and provides you with adequate financial coverage in times of medical emergencies.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.