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Glossary

Glossary

Every though health insurance word made easy

Agent

He is a person appointed by the insurer to work on behalf of the insurer.

Agent vs Aggregator

An insurance agent is a sales representative of an insurance company. Aggregator, on the other hand, acts a kind of platform for the buyer to see and compare a number of plans fitting his specific needs.

Assignee

It is that person who gets the benefits of a policy.

Beneficiary vs Nominee

A beneficiary is the person(s) or entity(ies) supposed to get the insurance proceeds when the insured dies. A nominee is the person supposed to receive the insurance proceeds when the insured dies. Note that the two differ in the definition just by one word, the nominee receives the proceeds but need not necessarily be able to use it. A nominee is not the owner, rather the nominee's primary role is to manage the death proceeds and hand it over to the beneficiary.

Claim

It is a notification that your hospital or doctor sends to the health insurance company. It is a type of bill sent to the insurance company.

Co-payments

Under this, a policyholder agrees to pay a part of the medical expense out of his/her own pocket, and the insurer will cover the rest.

Certificate of Insurance

The description of the benefits and coverage provisions forming the contract between the carrier and the customer. Discloses what is covered, what is not and the cash limits.

Co-pay vs Co-insurance

Both co-pay and co-insurance are a kind of out-of-pocket expenses that have to be borne by the insured when a claim is filed. The difference between the two is that while co-pay is a fixed sum that has to be paid while availing services, co-insurance is a fixed percentage of the total claim amount.

Cumulative Bonus

Cumulative bonus is similar to no claim discounts. For every claim-free year, the sum insured will progressively increase by 5%. However, the cumulative bonus is subject to an amount that can never exceed 50 per cent of the Capital Sum Insured and that the policy was renewed continuously.

Coverage

Coverage is the amount of risk covered for an individual or entity by the insurer. For example, if your health insurance policy offers coverage of Rs 5 lakhs, then you can claim up to that amount when the need arises.

Critical Illness

Critical illness is a health-related medical condition of a serious nature. Critical Illness insurance plan guards you against the financial expenses that occur in the diagnosis of critical diseases such as cancer, heart attack, kidney failure, etc. The range of critical illnesses covered and the payout may vary from one plan to another.

Deductible

It is the amount a policyholder has to pay before the insurance company pays the rest of the amount.

Dependents

Under a single policy, your dependents are legal spouse and children.

Domiciliary Hospitalization

It is the medical treatment of the insured patient taken at his or her house which requires hospitalization otherwise due to the reasons like non-availability of hospital space to treat the patient or the medical condition of the insured is such that the ferrying of the patient for the treatment to the hospital arena is not possible. Such treatments require the medical practitioner recommendation basis the merit of the case.

Exclusions

These are those conditions or circumstances for which an insured will not be given any benefit.

Free-look period

If you have bought a policy and realise you don’t want it, you can return it and get a refund.

Grace period

In case you forget or miss to renew your health insurance policy, don’t panic, many insurance companies give you a grace period to get your policy renewed.

Group Insurance

Health Insurance offered to the group of people without any medical examination is group insurance. This is typically issued to the companies, where employers insure their employees. And issues membership cards to them which are valid till their continued employment.

Hospital Cash Cover

Hospital cash rider provides for the daily cash that you may need for compensating the medical expenses during the stay in the hospital. Typically,you can claim benefits an amount depending on the nature of your stay. You can also claim a higher payout in case you are admitted to ICU. You will be eligible for the rider payout in case you are hospitalised for a minimum of 24 hours.

Insurer

The insurance company that assumes responsibility for the risk issues insurance policies and receives premiums.

Long-Term Care Policy

Insurance policies that cover specified services for a specified period of time. Long-term care policies (and their prices) vary significantly. Covered services often include nursing care, home health care services, and custodial care.

Long-term Disability Insurance

Pays an insured a percentage of their monthly earnings if they become disabled.

Lifetime Renewability

Some insurers may deny the renewal of your health plan considering your deteriorating health condition. It is, thus, recommended to go for health plans that offer Lifetime Renewability. With lifetime renewability, you can always cover the health risks irrespective of the age and health condition

Maternity expense

Some health insurance plans include coverage of maternity-related expenses but may have a waiting period as long as 48 months.

Network

A group of doctors, hospitals and other health care providers contracted to provide services to customers of the insurance companies for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.

No Claim Bonus

No claim bonus is a benefit given to the insured for a claim-free year in his health plan. The benefits are usually redeemed as enhancement of the sum assured or discount in the renewal premium amount for every claim-free year.

Out-of-Pocket Medical Expenses

Expenses which you need to pay from your own pocket for any medical care agreed in the co-payment ratio. When you hear the term “annual out-of-pocket maximum” in a health insurance plan, then it’s nothing but the highest amount you have to pay (excluding policy premiums) for the calendar year.

Premium

The amount that a policyholder pays periodically to an insurance company to maintain the cost of coverage.

Proposer

Proposer is a policyholder. The insurance company will pay out the claims to the proposer under the policy.

Portability

A policyholder may have issues (service concerns etc) regarding existing health insurance policy with an insurer. If he stops paying renewal premium and buys a fresh policy, the policyholder loses on certain benefits especially the time-bound exclusions.

Pre-existing disease

Any condition, ailment or injury or related condition(s) for which you had signs or symptoms, and/or were diagnosed, and/or received medical advice/treatment within 48 months to prior to the first policy issued by the insurer.

Policy

It is a legal document, which acts as a contract between the insurer and the insured. It contains conditions of the insurance.

Reasonable Charges

One would have noticed the mention of 'reasonable charges' on a hospital bill. Insurers prefer paying claims which are reasonably charged by the hospital and not an exorbitant rate for any of the expense-head.

Rider

Rider is nothing but an additional benefit which you can buy by paying an additional premium. Riders are optional and not compulsory, it's up to you to choose it or not.

Restoration of Sum Assured

The rebuilding of the sum assured of your health policy once the policy sum assured is exhausted because of unanticipated medical requirements. The policy regains the health cover without additional paperwork and other formalities. It is not available with all health plans rather such option is associated with limited health plans.

Sum insured

The amount insurance company will pay in case of any hospitalisation, medical expense.

Sub-limits

This is the extent to which the insurance company will bear the cost arising from extra medical expenses such as room rent, post hospitalisation, etc.

Sum Assured vs Sum Insured

Sum Assured is the pre-defined amount, agreed upon by the insurer and the insured, to be paid in case of an eventuality. Life insurance works on the sum assured.
Sum Insured is the upper limit of the payout that the insurance company is liable to pay to the insured in case of an eventuality. Thus, sum insured follows the principle of indemnity which states that the insurer is to compensate for the loss of the insured so as get him restored to his financial position. Non-life insurance such as car insurance, health insurance, and home insurance works on the sum insured.

Super Top-Up

A super top-up health plan puts together several incidences of hospitalization cover the medical bills. It covers a total/aggregate of the medical bills in a year, not just the single instance of hospitalization.

Top Up

A top-up health policy provides additional coverage to those who have a running health plan. This plan covers the medical expenses that may arise due to an illness/injury over and above the limit of the actual cover. A top-up health plan works by ‘single incidence hospitalization’, however, a super top-up plan looks at the aggregate claim.

Waiting period

The time period for which the insured person should wait before availing benefits of the policy.