The ABC’s Of Health Insurance: Simplifying Frequently Used Terms In Your Policy Document

Have you ever held a legal document in your hand and had the urge to pull out your hair? The complicated terms may make you feel like you are reading something right out of the Shashi Tharoor universe. Such is the nature of legalese language that it can confuse anyone. But, when it comes to health insurance terminology, we want to relieve you of this annoying sensation of having to decode long complex jargon on your own. So we’ve prepared this quick guide to understanding health insurance terminology. We promise, it is really easy! 

The health insurance glossary you didn’t know you needed 

Let’s go in the alphabetical order to simplify the most common medical insurance terminology you will encounter in your health insurance policy  document. 

• Ambulance cover 

When you need hospitalization in an emergency, you typically need to c all for an ambulance. Hospitals levy charges for offering ambulance facilities, but most policies cover this cost up to a certain limit by offering an ambulance cover. 

• Additional rider 

An additional rider, also referred to as add-on rider/add-on cover is a facility that allows you to enhance your insurance coverage by paying a separate premium. Common add-on riders include critical illness cover, maternity rider cover, personal accident cover, etc. 

• AYUSH treatments 

Under the IRDAI’s guidelines, you can file insurance claims for non-allopathic or alternative treatments like Ayurveda, Yoga, Unani, Siddha and Homeopathy (AYUSH). These are known as AYUSH treatments. 

• Beneficiary 

A beneficiary is any individual, group of individuals (as in family floater plans) or an entity such as a trust or corporation, entitled to receive health insurance coverage benefits. Such persons/entities may also be referred to as policyholders. 

• Cashless hospitalization 

Cashless hospitalization is a facility that allows you to seek hospitalization at a hospital in your insurer’s network without paying anything upfront. You need to inform the insurer about your chosen medical facility. The insurer’s representative directly pays the hospital bills up to the sum insured amount.  

• Co-payment 

Co-payment is a health insurance term used to refer to the specific portion, typically a fixed percentage of a claim amount that you, as the policyholder, need to pay out of your pockets.  

• Claim 

A claim is the formal request a policyholder must make to receive compensation or reimbursement for the medical costs incurred by them. To raise a claim, you must submit the duly-filled claim form, diagnostic reports, medical bills, etc., within the stipulated timelines. 

• Critical illness 

Diseases that are classified as severe or life-threatening are referred to as critical illnesses under health insurance terminology. Such treatments typically involve higher costs and longer treatment tenures. 

• Critical illness insurance 

Health insurance policies A designed to cover the costs of specific critical illnesses, wherein the insurer pays the sum insured amount as a lumpsum and not as per actuals, is known as a critical illness policy. 

• Day care treatments 

Any medical treatment covered under your policy, that entails less than 24 hours of hospitalization, wherein the patient is discharged on the same day is regarded as day care treatment. Examples of such treatments include dialysis, chemotherapy, cataract surgery, etc. 

• Deductible 

A deductible is the fixed amount that policyholders need to pay from their pockets before their insurance coverage kicks in. If the costs of a medical procedure are less that the applicable deductible, your insurer is not liable to cover those costs. 

• Daily hospitalization cash 

A benefit under which the insurer provides a fixed cash amount for every day that an insured member is hospitalized is called daily hospitalization cash. This benefit helps you bear the additional costs not covered under your health plan, such as compensation for loss of income due to hospitalization.  

• Exclusion 

Exclusion is a health insurance term used to refer to the general illnesses, treatments and procedures not covered under a health insurance plan. Examples include cosmetic surgeries, HIV/AIDs treatment, medical conditions arising due to self-harm, substance abuse, etc.  

• Family floater policy 

A family floater policy is one that covers the medical expenses of various members of a family unit, such as the policyholder, their spouse and children under a single plan. The sum insured in such policies is shared by all the insured members. 

Did You Know? The free look period is the time insurers give potential customers to review their newly purchased health insurance policy, and cancel it if needed. You can typically cancel the new policy within 10 to 15 days from the date of issue.

 

• Grace period 

The health plan terminology grace period refers to the extension insurer’s give you if you do not renew your policy by the applicable renewal date. This period usually lasts for 15 to 30 days after the policy expiration date. 

• Group health insurance  

Health insurance plans that cover several members of an organization are called group health insurance plans. Companies typically pay the premiums of these policies and provide it as a perk to their employees. 

• Hospitalization 

The act of being admitted in a hospital is called hospitalization. This health insurance terminology is used in the context of both – a hospital stay exceeding 24 hours or a treatment completed in less than 24 hours.  

• In-patient treatment 

Any treatment for which you need to stay in the hospital for a period of 24 or more consecutive hours, to be eligible to file a claim is known as in-patient treatment.  

• IRDAI 

The abbreviation IRDAI stands for the Insurance Regulatory and Development Authority of India. IRDAI is the governing body, responsible for formulating the rules and regulations in India’s insurance sector. 

• Insurer and insured 

In the context of health insurance, the insurer represents the insurance company providing the insurance coverage benefits whereas the insured is another word used to represent a policyholder. 

• Maternity cover 

The health insurance plan that covers pregnancy and child-birth related costs is known as maternity cover. You can buy this plan as a standalone policy or as an additional rider. 

• No-claims bonus 

No-claims bonusA, also called cumulative bonus is a benefit under which your insurer enhances your sum insured at no extra costs. You become eligible for this benefit if you do not file any claims during a policy year and can get up to 50% of the sum insured as bonus for five consecutive claim-free years. 

• Network hospital 

A hospital or healthcare facility registered under the insurer’s network, where policyholders can seek cashless hospitalization benefits is known as a network hospital.   

• Out-patient department 

Out-Patient Department or OPD refers to hospitals and individual healthcare facilities which offer medical treatments and consultations to policyholders, wherein hospitalization is not required.   

• Portability 

If you are not happy with your current insurer’s services or if you find a policy that offers the coverage you need at a lower cost, you can change your insurer without losing your benefits. This is known as portability.  

• Premium 

Your insurance charges you an annual fee to provide you coverage. This fee is known as a premium, which you must pay every year to enjoy uninterrupted insurance coverage.  

• Pre-existing illnesses 

Any medical condition you are diagnosed of before you buy a health insurance plan is known as a pre-existing illness. If you suffer from any such illness, you must inform the insurer before buying a policy. 

• Pre and post-hospitalization costs 

Before and after you are hospitalized, you may need to undergo medical screenings tests and doctor consultations. In medical insurance terminology, these are known as pre and post hospitalization costs. 

• Room rent 

The charge associated with being hospitalized, wherein you need to rent a hospital room is referred to as room rent. Insurers usually impose a cap or sub limit on the maximum room charges they will cover.   

Did You Know? In the event that you choose to be hospitalized at your preferred medical facility instead of a network hospital, you need to bear the charges upfront and file a claim. Such a claim is known as a reimbursement claim. 

 

• Sum insured 

Sum insuredA is the maximum coverage amount borne by your insurer. Every health insurance policy comes with a fixed sum insured amount beyond which the insurer is not liable to cover the costs.  

• Waiting period 

The period during which you cannot file an insurance claim despite having an active health insurance policy is referred to as the waiting period. This period can last from 30 days to 4 years, depending on the policy type and coverage terms. 

Need Insurance That Makes a Difference? Consider Manipal Cigna Health Insurance 

With this glossary of health insurance terms, we hope we have helped relieve the anxiety that comes with reading a legal document, so you can confidently decode your health insurance policy. We also have a more detailed glossary that you can refer to on the Manipal Cigna Health Insurance website. If you are looking for the ideal health insurance plan for yourself and your loved ones, you can find an array of options on our website with sums insured ranging from ₹5 lakhs to ₹1 Crore. You can buy the policy and even file claims online.  

Fulfil your health insurance need at the click of a few buttons. Visit Manipal Cigna Health Insurance today.