If you are planning to buy health insurance in India, you are likely to find yourself lost in the abundance of options available. Moreover, you cannot gauge the exact details of a policy without thoroughly reading the policy documents. These documents contain important information in terms of policy coverage and criteria. And you need to look at these documents and understand every word to assess the financial security and coverage you are being offered.
However, some terminology in health insurance plans can be difficult to understand. With a proper understanding of health insurance details, you can protect yourself from making serious purchasing mistakes. Failure to do so may result in complications at the time you need to make a claim. Hence, before deciding on the right health coverage for you and your family, you need to know the important health insurance terms associated with your policy. They include:
- Co-payment
Co-payment is a way of sharing medical expenses in a health insurance plan at the time of claim. Whenever you make a claim, you have to pay a specific share of the medical expenses. The rest of the amount will be covered by the insurance provider. Different medical expenses can have a different policy and amount of co-payment. Moreover, some plans also need you to cover a deductible before your claim is accepted and co-payment comes into effect.
- Deductible
A deductible is a fixed amount of money that you need to pay before the insurance provider accepts your claim and provides you medical coverage. While the co-payment can differ from one medical service to the other, a deductible is fixed by the insurance provider and is the same for any type of claim. There are two types of deductibles – standard deductible & voluntary deductible. The standard deductible is a mandatory payment you have to make at the time of claim. You can choose to include a voluntary deductible if you want.
- Premium
A premium is essentially the price you buy the health insurance policy for. You can also look at it as the fee for having medical coverage over a specific period of time known as the policy term. The premium is set at the time of buying the policy and only changes at the time of policy renewal. Who pays the premium depends on the exact nature of the policy and the purchase. The premium can be paid by employers, unions, employees or shared by two entities.
- Third-Party Administrator (TPA)
A third-party administrator is an individual or organization appointed by the insurance provider to carry out claims processing, payments to providers, and deal with other related matters in the operation of health insurance. Since the TPA is not the policyholder or the insurance provider, it will be considered a third-party; thus, the name.
- Claim
A claim is a request for medical coverage made by the policyholder to the insurance provider in the event of a medical emergency or planned hospitalization. There are various ways to make a claim. They differ by the medium that you can use to make the claim. They include calls, emails, websites, and a health insurance app. Depending on your insurance provider, you can make a cashless claim or a reimbursement claim. The former is often preferred as it lowers the policyholder’s burden to arrange money for medical treatment.
- Dependents
Dependents are the members of a family that rely on the earning member for their basic living expenses. In health insurance, a policyholder can include their dependents under the scope of the policy’s coverage. However, the policy would have to be a family floater policy instead of an individual plan.
- Exclusions
Exclusions are benefits that are not available in the policy. For example, cosmetic surgeries are often not included in a health insurance policy. If you seek medical assistance for any treatment or procedure, you will have to cover the cost out of your own pocket.
- Waiting period
Certain policy benefits are not available to the policyholder insured when taking out a new health insurance policy. To have those benefits, the policyholder has to wait for a fixed period of time after they have purchased the policy. Upon completion of the waiting period, the benefits in question will be activated. In addition to the initial waiting period of the policy, there can be a waiting period for pre-existing diseases, critical illnesses, and much more. Each of these waiting periods can have a different duration. For example, the typical waiting period for pre-existing conditions is 4 years.
- Pre-existing disease
Pre-existing disease is a term used for an illness or medical condition that you had before buying the policy. Since, the illness developed before the coverage of the policy stated, you will have to go through a waiting period to get coverage for the policy. It is advisable to inform the insurance company about any existing diseases and any ongoing medications when you are buying the policy. Failure to do so can lead to a claim rejection in the future. If you do not know what pre-existing diseases you have, you can always use tools like health assistance apps and other methods to detect any health irregularities.
- Network
An insurance provider’s network is the group of doctors, hospitals, and other health care providers who have a partnership with the insurer. As part of the partnership, a policyholder would receive additional benefits for getting treatment from a doctor or a hospital in the insurance provider’s network. For example, policyholders will get cashless medical coverage if they admit themselves to a network hospital.
Knowing health insurance terminology is like knowing the ABCs. While it may seem a basic and simple thing to do, it is important to everything that would do in the future related to health insurance. Once you understand the terminology, buying and managing health insurance becomes much easier.
