Here we try to de jargonize some of the most commonly used health insurance terms to help you in making informed decisions.
Health Insurance Jargons
Co-payment refers to the option of sharing a predefined percentage of claim amount in between the insured and the insurer. Exercising this option helps in lowering premiums while purchasing a health plan, since a copayment restricts the insurer’s liability as the insured agrees to bear a percentage of the total claim amount from of his or her own pocket. For instance, if you agree to a co-payment of 20% , then in case of a claim worth Rs. 1,00,000 you are entitled to bear a sum of Rs.20,000 (20% of Rs. 1,00,000) from your own pocket while the insurer will take care of the balance amount of Rs. 80,000.
Deductible refers to a specified amount that the insured has to bear prior to the health insurance plan takes care of the balance. Every policy has a component of voluntary deductible. Since this arrangement relieves the insurer of a part of their liability, its aids in lowering premiums. Higher the deductible lower the premium. For instance, you have opted for a deductible of Rs.10,000 /- in your policy, then in case of a claim worth Rs. 1,00,000 you will have to bear Rs. 10,000 while the balance of Rs. 90,000 will be taken care of by your insurer.
Day Care Treatments
These refer to medical treatments or surgical procedures performed in less than 24 hours, either under general or local anesthesia in a hospital or a day care center. It is very important to note that Day Care Treatments do not include out-patient treatments. Some common day care treatments include Cataract surgeries, coronary angiography, chemo therapy, dialysis, etc. View the comprehensive day care treatment list.
Every claim free year earns you a higher sum insured, without any increase in the premium. In the first claim free year the sum insured is increased by 5% and for every subsequent claim free renewal it is increased by another 10 % on an average and is limited at 50%. Learn more about cumulative bonus in health insurance.
If you forget to pay your insurance premiums on time, insurers grant you an extra 30 days to pay the same. Though you would not be covered during this lapsed time period, once the premium is paid, the policy would be reinstated with all the benefits intact. Also referred to as a break in period clause, claims arising during this period will not be admissible.
Pre and post hospitalization Medical Expenses
Expenses incurred prior to hospitalization in diagnostic tests, consultations, etc, are referred to as pre hospitalization medical expenses. The same incurred after the hospitalization is called the post medical expenses, which includes follow-up medications, tests, treatments etc.
30 to 60 days prior to hospitalization is considered the pre hospitalization period whereas post hospitalization is usually 90 to 180 days after the hospitalization.
Personal Accident Jargons
Personal accident insurance policies are benefit policies that pay a lump sum amount in case of any accident related disability or death.
Permanent Total disability or referred to as PTD
When an insured is unable to carry on with the responsibilities of their occupation or is rendered incapable of finding any further employment due to an irreversible and permanent disability like amputation of both the legs and hands or total loss of vision, he or she is categorized as PTD.
Partial Permanent disability or PPD
It is typically stated as a disability that prevents the insured from performing one or more functions of their occupation, but does not prohibit them from resuming or taking up any profession. However, here too the loss of a limb or an organ is irreversible. Instances of PPD would be the loss of one hand or a leg or loss of one eye or a finger etc.
Temporary Total disability or TTD
When one suffers from an injury and is temporarily disabled but post treatment comes back to the normal state of health as before the injury or the accident, this is referred to as TTP. The injury here is reversible like a fractured leg or a hand or a severe cut.
Free look Period:
Free look period is a 15-day period, granted to every new health insurance or personal accident policy holder. During this time you may again analyze if a particular plan is suitable for you. Within these stipulated 15 days if you find the policy unsuitable, it can be cancelled and the premium will be refunded. However, the insurer will charge you for the days you had taken to reach a decision, while being covered.
Contributed by Suresh Sugathan, Head -Health Insurance, Bajaj Allianz General Insurance