As an add-on to your insurance, you can get an advance cash benefit. This means that when you’re hospitalised, you can get a portion of the estimated treatment costs in advance from the insurer. It’s a good-to-have benefit as this takes off some worry and gives you the assurance that a part of your medical expenses have already been taken care of and you don’t have to wait until the treatment is over. In most cases, 50% of the estimated costs are covered in the advance cash benefit, the rest is paid post-treatment.
It’s not a surprise to anyone that hospital costs are usually sky-high. Say you’re hospitalized after a minor accident and the hospital gives you an estimate of ₹80,000 to get you back up and running.
If you have an ‘advance cash benefit’ your insurance company will pay a certain percentage of the costs upfront, which is usually around 50%. In this case, they will pay ₹40,ooo based on the estimate during the beginning of the treatment and the remaining amount will be cleared after your treatment based on the final expenses incurred. Unlike cashless treatment, this benefit is available even for non-network hospitals.
As the name suggests, some insurance policies may come with an ‘Ambulance Cover.’ In that, the insurance company would cover the cost of transporting you (the policyholder) to the hospital. While buying the policy, do check the extent of this cover, some may have an upper and some may even cover air-ambulance costs–completely depends on the policy you buy.
You buy a health insurance policy and relax thinking, ‘Now I won’t have to pay a single rupee.’ Then comes the day of the hospitalization and extra expenses start rolling in.
That ambulance you had to take on your way to the hospital? That will be an extra ₹5,000 (or more) unless you have an Ambulance Cover add-on.
If your insurance policy includes ambulance cover, they will bear the cost of transporting you to the hospital. However, you should also check the extent of ambulance coverage. In some cases, they may even cover air-ambulance costs (First class, FTW!).
Annualised premium refers to the total amount you have to pay in a year to buy the policy. If you’re paying a total of ₹20,000 for a two-year policy, then your annualised premium would be ₹10,000.
Any One Insurance refers to a continuous period of any illness. For instance, if you’ve been admitted and recovered from a particular illness but happen to fall ill again or relapse within 45 days, it comes under ‘any one insurance’ or ‘any one illness.’
A beneficiary is a person who is named in the insurance policy gets all the benefits listed under the policy’s scheme. It’s just another name for ‘policyholder’ that’s used sometimes. For instance, if the policy is under your name, you are considered to be the beneficiary. Likewise, if you’re buying Group Health Insurance, the beneficiary would be the employee of your company.
You’re thinking of buying health insurance and you look at the document that mentions terms like ‘beneficiary’ and ‘policyholder’ but you aren’t sure who it’s being addressed to? To put it simply, if you are buying a health insurance policy for yourself and under your name, you become the beneficiary of the policy.
In the case of group health insurance, an employee is considered to be the beneficiary. In some cases, the policy may also cover their family (spouse, children, parents/parents-in-law), thus making them beneficiaries as well.
If your policy is of 10 lakhs, you are going to receive the benefits of health insurance. Similarly, if you are buying Group Health Insurance for your employees, they are the beneficiaries of the policy.
Cashless hospitalization is where you don’t have to pay any money out of your pocket for the hospitalization. The insurance company will directly pay the hospital for all the expenses and you don’t have to worry at all. Cashless claims are available only in network hospitals i.e. the hospitals that have a tie-up with the insurance company.
We’ve all seen in movies how a patient is due for an operation- the doctor comes out and asks the scared and nervous family to deposit ₹2,00,000 and threatens that they won’t begin the operation. For a lot of families, this would be a nightmare situation. How on earth does anyone bring such a huge amount of money immediately if a person in your family is hospitalized?
Well, you won’t have to pay this amount, if your insurance company gives you the option of a cashless facility. The insurance company will directly pay the hospital for all the expenses and you don’t have to worry at all. Cashless claims are available only in network hospitals (i.e.), the hospitals that have a tie-up with the insurance company.
Now that you have an insurance policy, you might be asking yourself, ‘how do I avail its benefits if I am hospitalized?’, ‘Will the insurance company send me the money by themselves?’
This is where claims come in. Say you’re hospitalized and your medical costs come up to around 1 lakh rupees. When you ask your insurer to cover the medical costs on your behalf, you are ‘claiming’ the benefits of your insurance policy.
A claim is a form of a request made by you to your insurance provider. A claim occurs after the occurrence of a specific incident that comes under an insurance policy. It is made to pay for the healthcare costs incurred during the incident.
There are two types of claims: cashless and reimbursement. The type of claim that you make will differ based on your agreement and the hospital where the treatment takes place.
Based on your agreement with the insurance company, you will have the option to file for a cashless claim or reimbursement claim. Once your treatment is over and you’ve claimed your benefits, the insurance company will settle the bills.
If you have a cashless claim agreement, you won’t have to pay any money upfront and your insurance company will settle the cost of the treatment, to the hospital directly.
On the other hand, if you have a reimbursement claim, you will need to pay the medical expenses which the insurance company will pay you back once your claim is approved.
When it comes to cashless claims, you have to notify the insurance company prior to your treatment or in the given window of 24hrs after hospitalization in case of emergencies.
Copay or coinsurance is a certain percentage of the total claim amount which should be paid by you, the policyholder. The remaining amount will be paid by the insurance company. For example, you might have to pay 20% of the expenses and the rest is covered by your insurance company. This is called a 20% copay. Ideally, you should try to get a cover that has zero copay, which would mean that the entire amount, in the event of hospitalization, would be paid by the insurer.
You’re thinking of purchasing an insurance policy of ₹10 lakhs and you’ve narrowed it down to two companies. Company 1 has an annual premium of ₹8,000 and Company 2 has an annual premium of ₹5,000. You choose Company 2 because it’s cheaper and offers the same insurance cover.
Some months down the line, you are admitted for a treatment which costs ₹2,00,000. However, the hospital asks you to pay ₹40,000 and inform you that your insurance company has paid just 1,60,000. So you may have saved 3K in the annual premium but the cost at the time of paying a hospital bill is ₹40K. This is where you discover the magical concept of co-payment and also realize why your premium was cheaper.
Copay or coinsurance is a certain percentage of the total claim amount, which is to be paid by you, the policyholder and the remaining amount will be paid by the insurance company. In most cases, the copayment is around 10 to 20 percent.
Corporate Floater Cover provides the employer flexibility to create a common pool for employees for use in special cases. Imagine this as a common sum that any of your employees can use if they exhaust the amount that’s insured in their individual’s policy limit, in case they have a heavy medical expense to bear.
Coverage is the total amount that an insurance company covers for a risk. The coverage amount helps you recover from the financial risk after sickness, injury or treatment. This is also known as the Sum insured (so don’t get confused between the two!)
Let’s say you’re in the middle of purchasing a new policy. You’re thinking of purchasing a policy worth 10 lakhs. Does this mean you’ll have to pay 10 lakhs? No. The policy amount is also known as coverage or sum insured.
What this means is that your insurance company will help you recover from the financial risk after sickness, injury or treatment up to the coverage amount. Now you might think, is this amount for the rest of your life? Your coverage amount is valid for a year. So if your insurance policy has a cover of 10 lakhs, your insurance company will help cover costs up to 10 lacs in a year
A cumulative bonus is a bonus or reward provided by the insurance company to the insured for not filing a claim in a particular year. For every claim-free year, the insurance company rewards you by increasing their sum insured in the following renewal year.
For instance, if you did not make any claims for a particular year, the insurance company might increase your sum insured by a particular percentage as a bonus. While purchasing your insurance policy, you should check if they offer a cumulative bonus as not every company might have this add-on.
Daycare refers to treatment or procedures that require hospitalization of less than 24 hours.
If you are undergoing cataract eye surgery, it qualifies as ‘daycare treatment’ as you do not need to be hospitalized or kept under observation for more than 24 hours. Insurance policies may or may not cover daycare expenses–so don’t forget to check this before making a purchase.
Let’s fast forward a couple of decades in the future and imagine that you are entering the 60s. While you don’t suffer from any major health issues, you do notice that your eyesight is not as good as it used to be. You make your way to your eye doctor and lo and behold, you might need to get cataract surgery.
You hear the word ‘surgery’ and you get nervous but your doctor assures you that it’s a normal procedure that doesn’t take more than an hour and you can go home on the same day. The doctor also tells you that it will cost your ₹40,000 for both eyes. Your insurance will probably cover it, right? Wrong!
Procedures like cataract, appendix or dialysis do not require prolonged hospitalization and come under the ‘daycare’ treatment category which many companies do not cover. Hence, you should always ensure that the policy you’re purchasing has a provision for daycare treatments.
DB Scheme or Defined Benefits Scheme focuses on paying a fixed amount to you for an insured event. The amount/benefit paid by the insurance company is fixed regardless of the hospitalization costs.
Policies like ‘specific illness’ policies are a good example of defined benefit schemes. For instance, the Corona Rakshak insurance is based on a defined benefit scheme – a lump-sum amount is paid to you, once, if you are tested COVID-19 positive. You get the amount irrespective of whether you’re hospitalised or get home treatment.
A deductible is the amount paid by you before an insurance company can pay any amount towards a claim. You’ll find that most insurance plans have a yearly deductible.
If your policy has a deductible clause, you are likely to have a lower premium. However, it also means that you have to pay a certain amount every time towards a claim (regardless of the claim amount).
You’ve just gone through treatment and are in the middle of settling your bill of ₹50,000. Now you are told that the insurance company will pay ₹30,000 and you’ll have to pay the remaining amount. You start combing through your insurance policy and realize that there’s a deductible clause of ₹20,000.
A deductible is an amount that you have to pay whenever you make a claim. Think of it as a fee. In this case, the deductible was of ₹20,000 which is why the insurance company paid just ₹30,000 instead of ₹50,000.
What happens if you have a claim of ₹15,000. Does that mean that you won’t have to pay anything as it is lower than your deductible?
Actually, that’s not the case. Your insurance company will pay only if the claim amount is more than the deductible amount. Since your claim is lower than ₹20,000, you will have to pay the full amount of ₹15,000.
Dependents are family members of the insured policyholder. In such cases, the benefits of the policy are extended to the dependents as well. If you were to take a policy for yourself, your parents, spouse and children will be considered as dependents.
When you’re looking for an insurance policy for yourself, you’d always be given the option of adding dependents to the plan. This will convert your individual health insurance policy into a family floater policy. Now, it’s completely your call who you’d want to add to the floater plan. If you are 25, unmarried and live with your parents, you’d cover them. In this case, while you are the beneficiary of the policy, your parents will be considered as dependents. They too would get the benefits of your insurance under family floater policy.
Similarly, if you are married and have two kids, your spouse, your parents and children will also be considered as dependents. Thus extending the benefits of your policy to them–at an additional cost, of course. Similarly, group health insurance covers just the employee but their dependants can be added by paying an additional premium.
Does this mean if you have a policy of 10 lakhs, each member of your family will get a coverage of 10 lakhs per year? No, your policy amount of 10 lakhs is the total coverage for everyone and shared by the beneficiary (you) and your dependents every year
Domiciliary expense refers to any treatment that you undergo at home under a doctor’s recommendation. In such a circumstance, even though you’re not at the hospital, it is considered and treated as home hospitalization.
For the domiciliary expense clause to click in, the treatment has to last for 3 days. Do keep in mind that not all insurance policies cover domiciliary expenses. However, it is a good clause to have in your insurance policy for times when you cannot shift to a hospital or are unable to find accommodation but need to be treated at the earliest
Donor expenses cover the costs incurred in the case of an organ transplant. The donor expense clause helps you cover for the costs incurred by the organ donor if you, the insured are the recipient.
Donor expenses like compatibility tests, harvesting, transplant, etc. fall under this category.
Exclusions are treatments and conditions that are not covered by the insurance policy. Common examples of exclusions include pre-existing conditions or cosmetic treatments. You’ll find the exclusions clearly mentioned in every policy document.
It’s quite difficult to get past the jargon of an insurance policy document. Just imagine that you are in a hospital with the perception that your insurance will take care of the treatment cost only to find out that it won’t. You purchase a policy expecting it to cover your medical expenses when you need it to but more often than not, certain treatments are not covered and they are known as ‘exclusions.’
One of the most common exclusions in insurance policies is for ‘pre-existing diseases.’ For instance, if you suffer from diabetes and your insurance policy has an exclusion for pre-existing diseases, any ailment or treatment that comes from it will not be covered and you will have to pay up. Keep in mind that such exclusions are different from ‘permanent exclusions’ like Injuries due to war, HIV, intentional injuries, congenital diseases which would never be covered under insurance. For exclusions like PED, you can actually get covered after a pre-defined waiting period, usually of 2-4 years. (Not for GHI–you can get rid of waiting periods at a small cost!)
Similarly, group health insurance policies have specific exclusions like Bariatric surgery, Lasik surgery, robotic surgery, cochlear implants, rejuvenation therapy etc. These exclusions are usually centred towards non-life threatening procedures or cosmetic surgeries and differ from insurer to insurer.
Floater cover is a health insurance plan that covers the entire family instead of just an individual. A floater cover provides insurance coverage to a group and allows them to share the benefits of the policy.
If you take a policy just for yourself, it will be an individual cover but if you include your family in it, it will fall under ‘floater cover.’
Flexible coverage refers to the ability of the insured to customise the policy based on their needs. It can allow you to choose between treatments, the sum insured, premium, premium tenure, etc.
Flexible coverage gives you the freedom to choose several factors of your insurance based on your needs.
Unlike terms and conditions, your needs are always changing. Let’s say a particular health insurance policy offers you maternity cover, family cover, alternative treatment cover add-ons for a yearly premium of ₹15,000. However, if you are single and aren’t planning a family anytime soon, two of the three benefits are not of any use to you.
Flexible coverage gives you the flexibility to choose treatments, benefits, your premium, etc at the time of purchase. And customize it in a way that makes the most sense to you while purchasing the policy.
Free look period is the try and buy version of insurance. For some days after you’ve bought a policy (usually 15 days), you have the liberty to cancel it and avail a full refund if you don’t find it beneficial.
A grace period is a fixed number of days after your premium renewal due date in which you can make the payment for your health insurance premium.
If your insurance policy has a grace period of 15 days, you can make your renewal payment within 15 days of the original due date and continue availing the benefits of your policy.
Let’s say you bought an insurance policy and it expires on March 10. If you have a grace period of 15 days specified in the policy, you can actually renew it anytime up to 15 days after March 10.
Group cover refers to a type of health insurance that covers an entire group of people as opposed to an individual. Insurance offered by employers to their employees is a good example of group cover.
Home healthcare stands for treatments that require hospitalization but are provided at home. A good example would be availing physiotherapy. If you are undergoing physiotherapy and want to claim the expenses, you can do so under home healthcare, provided that your insurance policy covers it has the option to do so.
You are just recovering from a severe fracture in your leg. Your doctor has recommended 10 physiotherapy sessions to help you get back on your feet (literally). The physio you reached out to charges around ₹1,000 per session which would total to around ₹10,000.
Now you might question if you need a physiotherapy session or not but you check your insurance policy that has a clause for treatments that require hospitalization but are provided at home. In this case, your physiotherapy expenses would come under home healthcare and your insurance company will pay for it based on the limit. The fancy term for all the expenses you incur during home healthcare is domiciliary expenses.
ICU limit is a form of sub-limit placed by insurance companies on the total claim amount. An ICU limit is the maximum amount that an insurance company will pay for ICU related expenses in case of hospitalization. In most cases, the ICU limit is a percentage of your total sum insured (usually 1-3%). If your ICU expenses exceed the limit, you’ll have to bear the cost of the difference.
Let’s say you have a health insurance policy that has sum insured (SI) as ₹ 5 Lakhs, and the ICU limit is set as 1% of sum insured, i.e. ₹5,000 per day. As it is with most hospitals, ICU charges/day are significantly higher. In this scenario, they cost ₹8,000 per day.
This might not look like a big deal initially. If you have to stay in the ICU for 2 days, you might think that you only have to pay ₹3,000 extra per day which comes to ₹6,000 for two days.
However, that’s not how it works due to ‘proportionate deduction.’
What happens is that if you exceed the ICU limit, proportionate deduction is applied on all costs including surgeon, consultation, diagnostics, doctor visits, etc.
|If ICU Charges Under Limit (₹5,000)||If ICU Charges Over Limit (30%)|
|ICU Charges ₹10,000||ICU Charges ₹3,000|
|Surgery Cost ₹1,00,000||Surgery Cost ₹30,000|
|Consultation Charges ₹ 5,000||Consultation Charges ₹1,500|
|Diagnostics ₹5,000||Diagnostics ₹1,500|
|Total Sum Paid by Insurer: ₹1,20,000||Total Sum Paid by Insurer: ₹36,000|
Yes, this can get a little confusing. To understand how proportionate deductions and ICU limits work, you can read this detailed article>
While going through your policy document, you’ll notice several treatments and illnesses stated under ‘inclusions.’ These are treatments, diseases and healthcare which will be paid for by the insurer under the policy.
Congratulations! You’ve just bought an insurance policy that covers cancer, heart attack and other major illnesses. You know this for sure because the insurance policy has listed them as ‘inclusions.’
Even though most policy terms are usually difficult to understand, this one is pretty straightforward. Inclusions are treatments and illness that your insurance company is willing to pay on your behalf.
An indemnity clause in your policy allows you the freedom to make several medical decisions. So, several choices like the doctor, hospital, etc. during the treatment are totally your call, and your insurer cannot make you choose otherwise.
In-patient care refers to a patient who is hospitalized or admitted formally in an institution such as a hospital to undergo a specific treatment for at least one night. Anyone who’s admitted in a hospital for any treatment that needs more than one night, is under ‘in-patient care.’
You’ve started feeling this sharp pain near your kidney area and it’s reached to a paint where it’s simply unbearable. You go to the nearest OPD and the doctor runs some tests and concludes that you have kidney stones. They are easily removable but you’ll need to stay in the hospital for two nights so they can observe you.
In this situation, where you have to be formally admitted and require hospitalization for at least one night, you fall under ‘in-patient care.’
An insurer is the entity that provides the financial coverage according to the set terms of the insurance policy during your health crisis. If you are purchasing the insurance policy from a particular company, the company will be called as the ‘insurer.’
The master policy is a combined insurance policy given to a group of policyholders. Master policy replaces the need of providing individual policies to every member of a particular group. For instance, if you’re covered under a group health insurance provided by your employer, the policy that will be provided will be known as the ‘master policy.’
A maternity add-on is an additional and optional benefit that can be added to a health insurance policy. Maternity add-on covers expenses related to the delivery of a child, newborn cover, pre, and post-maternity care, etc.
Imagine if you are being admitted in a hospital to deliver a child or are admitting your wife to deliver a child only to find out that your insurance does not cover expenses related to maternity care.
In most policies, maternity care is an add-on that covers expenses related to the delivery of a child, newborn cover, pre, and post-maternity care, etc. If you are someone who’s thinking of starting a family in the near future, it’s essential that you look for maternity cover before purchasing a policy.
Named ailments are those health conditions that have been diagnosed before you purchase an insurance policy. For instance, if you list out your existing ailment, it could be diabetes or high blood pressure, it would fall under ‘named ailments.’ Frankly, it’s just a fancier name for pre-existing diseases.
If you are purchasing an insurance policy and you have been diagnosed with certain ailments before. These could be diabetes or high blood pressure, for example. You are required to disclose these ailments to your insurance provider while purchasing a policy.
Network provider refers to a doctor, healthcare professional, hospital, or institution that is under contract with an insurance provider to provide medical care to you under a particular plan. If you are availing treatment associated with a network provider, you are likely to get a cashless facility and a more streamlined claims process.
You are thinking about purchasing a new health insurance policy for yourself and you’re going through the policy document. There, you come across this list of hospitals and medical institutions near you. You also happen to recognize hospitals that are barely a kilometre away from your home.
These hospitals are what you call ‘Network Hospitals.’ Your insurance company has a contract with them to provide you with the necessary medical care. If you do happen to visit these network providers for any treatment, you will most likely get to take advantage of a cashless treatment
Newborn cover is the health insurance cover that is provided to your newborn baby. Newborn cover falls under a family floater cover. You can avail a newborn cover but the benefits under most policies only begin after 3 months and usually cover treatments like vaccinations and follow-ups.
You just had a baby, congratulations! After childbirth, you go home and celebrate the arrival of your newborn with your family. After a while, you’re back at the doctor’s clinic for follow-ups and before you know it, you have to get your baby vaccinated. All these costs tend to add up quickly, unless you have a newborn cover.
A newborn cover is an insurance add-on that helps you stay financially secure against any medical costs that are covered by most insurance policies after 3 months of your baby’s birth.
A no-claim bonus is a form of reward offered by the insurance company. No Claim Bonus or NCB is added to the total sum insured every claim-free year. Let’s say that you didn’t make any claim for this year. When your insurance policy is renewed, the insurance company increases the sum insured by a certain percentage as a ‘no-claim bonus.’
You’ve taken a policy for Rs.5,00,000 and not made any claim in the first year (Congrats for the good health!) and your insurance provider offers a No-Claim Bonus of 10% for every claim-free year.
Which means that for your second year, you will get an increase of Rs.50,000 without paying an additional premium while renewing. NCB is offered by insurance companies to counter the rising healthcare costs, which are estimated at around 10 to 15 percent every year.
The non-floater policy is also known as individual policy. A non-floater policy covers an individual, so all benefits are individual. You’ll come across this term only if you want to buy insurance for yourself and your sibling without including your parents (since they might have their own policy already!). Since, dependents can only be spouses, parents or children, your brother and sister will have to buy a separate individual policy and that’s what a non-floater insurance means. Unlike a floater policy, the benefits of a non-floater policy are limited to just one person.
Non-network refers to the doctor, healthcare provider or hospital that doesn’t have a contract with the insurance provider of the policyholder. If you are availing treatment associated with a non-network provider, you are likely to get a reimbursement claim facility.
You have a surgery planned in the coming month and it’s time to choose a hospital for your treatment. Now, you have two options: Hospital A is 5kms away and Hospital B is 2kms away. You have decided to choose Hospital B as it’s more convenient.
You call your insurance provider as it’s a planned treatment. They let you know that you’ll have to pay the cost of your treatment and submit the bills to the insurance company. They will later reimburse you the amount on approval.
The reason behind this is that Hospital B is a non-network hospital. Which means that it doesn’t have a contract with your insurance company and the cost of any treatment you avail can only be reimbursed later on.
OPD refers to the Outpatient Department in a hospital. An OPD Cover allows you to make a claim for any expenses such as consultation, medicines, diagnostics, along with certain minor procedures.
You wake up one morning, dizzy and have a high fever. You and your family rush to your nearest hospital where they guide you to the OPD or Outpatient Department. There the doctor checks you out, orders a couple of tests and based on those, prescribes medicines. At the end of the day, you are left with consultation fees, test fees, medicine charges,etc.
While you’re there you do realize that your insurance policy has a OPD Cover as well, which means that you don’t have to worry about these expenses as they will be covered by the insurance company.
PED or ‘Pre-Existing Disease’ stands for a health condition or ailment that was present in the policyholder before the beginning of their health insurance policy. Diseases like cancer, heart ailments, diabetes, etc. are common examples of PED.
You’ve finally made the decision to purchase a health insurance policy, however, you want to wait for a couple of months as your finances are tied up. Much to your dismay, 15 days later, you get diagnosed with diabetes.
Now you speed up the process of purchasing your insurance policy and while filling out the form, you notice that they want you to list out any existing diseases. For you, diabetes comes under PED or Pre-Existing Disease as it was present before you began your health insurance policy.
PED coverage refers to the coverage of the medical expenses that occurred due to any pre-existing diseases of the policyholder.If your insurance policy has a clause for PED coverage, you can be rest assured that any costs incurred due to any PED will be covered by the company based on the policy details.
Choosing a health insurance policy if you have an ailment like high-blood pressure or have suffered from a heart attack before can be challenging. You have probably spent hours combing through insurance companies to find the one that’s right for you.
In such a situation, you want to choose an insurance company that has PED or Pre-Existing Disease coverage. Which means that the insurance company will take care of the medical expenses that occur because of your current ailment. Some insurance companies do have a waiting period of 2 to 4 years for certain diseases. Hence, you should select your insurance provider carefully.
ability refers to the ability of a policyholder, especially an employee to transfer the benefits of their current health insurance benefits if they change employers. If you are under a group health coverage but leave your job midway, portability allows you to avail the same benefits even when you join a new job or are covered by a different employer.
You’ve been working for your employer for over 2 years now. You now feel like it’s time to jump ship as you want to learn more and grow in your career. However, you are torn because your employer offers great health insurance benefits for you and your family.
Thankfully, your dilemma doesn’t last for long as you learn that you can transfer the current benefits of your health insurance when you switch to a new employer due to portability and they too offer health insurance, albeit with fewer benefits than your current one.
Post hospitalization coverage refers to the coverage of expenses incurred after the policyholder has been discharged from the hospital. For ex, common instances like follow-ups, tests, and medicines fall under post-hospitalization coverage.
You’ve just been discharged from the hospital after undergoing a treatment. Thankfully your insurance covered the hefty medical costs that came with it. You go home thinking about how lucky you are to have such a reliable insurance policy.
And then it begins. Follow-up consultations, several diagnostic tests and medicines for the next two months. You begin to realize the costs are now piling up and paying these bills is beginning to feel like a burden. Thankfully, your insurance policy has a provision for post-hospitalization coverage that pays for such expenses that occur after your treatment.
While choosing your insurance policy, you should keep an eye out for post-hospitalization coverage as it is extremely helpful in the long run.
Pre hospitalization coverage refers to the coverage of any expenses incurred by the policyholder before the hospitalization. Common costs like a consultation, diagnostics, etc., that have occurred during a fixed period of time before the hospitalization can be covered.
You’ve been unwell for a while now and you decide to go to a doctor. They order some tests and there is no conclusive evidence of an ailment so they prescribe some medicines and ask you to rest. Unfortunately, your illness keeps on worsening over the next week and you visit your doctor again who then does some more tests like X-Ray and MRI Scans which cost around ₹10,000.
After the results, they diagnose your illness and recommend that you get treated at the earliest. After your treatment, you realize that your insurance company paid for the treatment costs but not for the tests and medicines before it.
It’s because your insurance policy did not have ‘pre-hospitalization’ coverage that takes care of expenses like consultation, diagnosis,etc that occur during a fixed period of time before the hospitalization.
Premium refers to the amount you pay to the insurer every year as a part of the policy contract to cover your health risk. If you are paying a sum of ₹10,000 every year to avail health insurance of 5 lakhs, the yearly payment of ₹10,000 is your premium paid.
You are thinking of purchasing a new policy but are torn between three options: 2 lakhs, 5 lakhs and 10 lakhs.
You feel like the cover of 2 lakhs is a bit less and the premium of ₹15,000 for 10 lakh cover is too high. For this reason, you choose the policy that offers a cover of 5 lakhs with a premium of ₹10,000.
If you are paying a sum of ₹10,000 every year to avail health insurance of 5 lakhs, the yearly payment of ₹10,000 is your premium paid.
Premium Allocation Charge (PAC) is that part of your premium that is taken for the initial expense incurred towards issuing the policy such as the distributor fee and the cost of underwriting. Any cost that the insurer occurs to provide the policy, over and above the actual cost of the policy would be accounted for as PAC. This would actually be included in the overall amount you pay to the insurance company or gets cut from the sum insured to you.
To ensure that insurers don’t deduct a very high Premium Allocation Charge (PAC), the Insurance and Regulatory and Development Authority, or IRDA, has created guidelines that ensure a cap on these charges. This is as a fixed percentage of the premium received and is usually charged at a higher rate in the initial years of a policy. For example, if the PAC is 12 percent, then on a premium of Rs 1 lakh, Rs 12,000 gets deducted and the balance of Rs 88,000 is available for covering up your healthcare costs.
Prenatal and post-natal expenses stand for the costs incurred during a pregnancy and after the delivery of the child. Treatments like ultrasound, delivery procedures, medicines, consultations, etc. come under pre and post-natal expenses.
Having a child is a wonderful feeling. You are looking at the beginning of a new phase in your life. You also have to be cautious about the 9 months of pregnancy along with taking care of the newborn, ensuring that they get the right healthcare.
Thankfully, insurance companies today provide coverage for pre-and post-natal expenses to take care of your financial responsibilities. These cover treatments like ultrasounds, delivery procedure, consultations, postnatal care, etc.
Preventive care is done with the aim of early diagnosis and monitoring one’s health. Unlike diagnostic care, preventative care isn’t aimed at a specific symptom or illness but focuses on the overall health of an individual–this can include fitness consultations, dietary monitory, etc.
Preventive check ups include screening, tests, and diagnostics meant to prevent the onset of an illness and increase the chances of early detection of any disease. If a company offers semi-annual or annual checkups to their employees, these checkups fall under the category of ‘preventive checkups’,
You’re someone who believes in the mantra of ‘prevention is better than cure.’ You ensure that you go for a full-body checkup once a year where you pay a consultation fee and run several blood tests that cost you around ₹2,000. What seems like a small yearly amount snowballs into tens of thousands of rupees spent over a span of many years.
If your insurance company has a provision for preventive checkups, they will be taking care of costs that come with screening, tests, and diagnostics meant to prevent the onset of an illness and increase the chances of early detection of any disease.
The proportionate deduction is applied when you choose a room that has a higher charge than the agreed-upon room rent limit in your insurance policy. In that case, you’d not only have to pay the additional room charge, but also a proportionate amount of all the expenses too. For example, if your room rent limit was 25% of the actual room you pick, then the insurer will pay only 25% of the entire bill except the MRP products such as medicines. Now, if you have a bill of 2 lakhs, this would mean that the insurer will pay only ₹65,500, and the rest ₹1.34 Lakhs will be borne you, even if you have a policy of ₹2 or more than ₹2 Lakhs.
Pro-rata refund is the refund money issued to the policyholder in the event of a cancellation. The pro-rata refund is calculated based on the unearned premium credits of the total policy term.
Let’s say that you have taken a health insurance policy for a year . Somewhere down the line, you feel like you made the wrong decision and cancel it after six months. The unused six months will be refunded to you based on the pro-rata refund policy of your insurance provider.
Let’s say this insurance policy had a premium of ₹12,000. If they offer a pro-rata refund, you are now eligible to receive a refund of ₹6,000 based on the unused credits of six months.
Reasonable and Customary Charges or R&C Charges refer to the average fees charged in the healthcare sector based on the location, service, and community. R&C charges help you get an estimate of what the medical costs are in your area and give you a better idea about the overall treatment expenses. You should always check these before deciding upon the sum insured for your policy.
Medical costs tend to differ based on where you live. If you are in a Tier-1 city, they are likely to be higher than that of a Tier-2 or a Tier-3 city. Reasonable and Customary Charges or R&C Charges refer to the average fees charged in the healthcare sector based on the location, service, and community.
R&C Charges of a city like Mumbai or Delhi will be much higher than that of a city like Nashik or Kochi. It’s important to look at this before deciding your Sum Insured as you do not want to be under-insured and face a financial burden during a health risk.
Reimbursement refers to the repayment of medical expenses by the insurer to the insured after they’ve incurred out-of-pocket expenses for their medical treatments. Under this, any expenses like hospitalization, treatment costs,etc., will be paid by you initially and then the insurance company will reimburse you after the treatment is over and the claim is settled.
Repatriation of mortal claims refers to the transportation or reparation of the mortal remains of a person in the event of a death in a different country or a different location than the stated home of the deceased.
Riders are additional benefits that a policyholder can add to their existing insurance policy for an added premium. If you add any extra benefits on top of the benefits and inclusions offered initially, these are considered as ‘riders.’
Room rent limit is the maximum payment an insurance company will make towards room rent during the hospitalization of the insured. The room rent limit is usually a fixed percentage of the total sum insured.
If you do exceed the room rent limit set by the insurance company, you are responsible for paying the amount out-of-pocket and will not be covered under your policy.
Let’s say you have a health insurance policy that has sum insured (SI) as ₹ 5 Lakhs, and the room rent limit is set as 1% of SI, i.e. ₹5,000 per day. As it is with most hospitals, The room that you like, which is a private room costs roughly ₹10.000 per day.
This might not look like a big deal initially. If you have to stay in the hospital for 2 days, you might think that it is only ₹5,000 extra per day which comes to ₹10,000 for two days. However, that’s not how it works due to ‘proportionate deduction.’
Which essentially means that all costs including surgeon, consultation, diagnostics, doctor visits, etc. are directly proportional to the room you’ve chosen. If the Room Rent Limit is 50% of the actual room cost, your insurance company will pay only 50% of the charges. For example, if your surgery costs ₹1,00,000 the insurance company will pay just ₹50,000 and you’ll have to pay the remaining ₹50,000.
Specific diseases refer to a disease-specific insurance plan that is designed to provide cover for a specific disease or illness. One example of this would be ‘cancer insurance’, which is designed specifically for cancer treatments and to cover all the costs that come with it. Even insurance like Corona Kavach and Corona Rakshak fall into this category.
Sub-limit is the limit placed on the claim amount by insurance companies on certain diseases, treatments, or procedures. A sub-limit is usually capped at a certain percentage of the total sum insured or a fixed amount determined by the company and agreed upon by the insured.
ICU limits, room-rent limits are examples of sub-limits placed by the insurance companies.
You are quite content after buying a health insurance policy of ₹5 lakhs for a really low annual premium. You’re sifting through the documents and you come across a term called ‘sub-limit.’
It shows that as per your policy details, the insurance company will pay 1% of your SI or Sum Insured towards expenses like ICU and Room Rent. You do the math and it comes to ₹5,000/day. Next, you call a nearby hospital and find out that the rooms there start at ₹8,000/day and ICU costs are sky-high.
You then realize that you will eventually have to pay out of pocket as the sub-limits set by your insurance company won’t be enough if you’re hospitalized.
Subrogation refers to the legal right of the insurer to pursue a legal matter against a third-party on behalf of the insured. If you happen to incur any damages by a third party, your insurance company can take up the matter on your behalf. For instance, if a health insurance policyholder is injured in an accident and the insurer pays ₹40,000 to cover the medical bills, that same health insurance company is allowed to collect ₹40,000 from the at-fault party to reconcile the payment.
Sum Insured is the total amount your insurance provider will pay against all medical costs during hospitalization in your year of coverage. Usually, SI ranges from ₹ 50K to 10 lacs. The premium varies acc. to the SI you choose.
You have an insurance policy of ₹5 lakhs. During the year that your policy is valid, you undergo two treatments. The first one cost you ₹2,50,000 and the second one cost you ₹2,80,000.
After your first treatment, you had a balance of 2,50,000 for the remainder of the year but because your second treatment cost more than that, you had to pay ₹30,000 out of pocket.
In this situation, ₹5,00,000 is the total sum insured that your insurance provider paid against your medical costs in your year of coverage and all expenses that exceed that, have to be paid by you.
Surrender refers to the situation when you decide to exit an insurance policy before the maturity date. The average duration of an insurance policy is of a year. If you want to exit the policy before that, you will be surrendering your policy.
Tele-consultation refers to healthcare services provided through a telephonic or digital medium in a situation where the doctor and patient cannot be physically present for the consultation. For example, if you consult with a doctor over a phone or video call, it is considered to be a tele-consultation.
It’s the onset of a chilly winter and you wake up with a high fever, cold and incessant cough. As luck would have it, your trusted family doctor is out of town for a wedding. Since you and your doctor cannot be physically present for a consultation, you decide to call them and ask for advice.
The service provided by your doctor through a phone or video call comes under tele-consultation.
Temporary total disability stands for a total loss of functionality in one or more limbs and is considered to be temporary with a partial or prolonged recovery period.
If a doctor declares that the injured can recover after a while but currently has no mobility, you can consider it to be a temporary total disability.
TPA or Third-Party Administrator is someone who provides various services such as processing claims, beneficiary management, etc., under contract with the insurance company.
Insurance companies outsource these processes to TPAs to streamline their system. If you are making a claim after a medical expense, you will most likely be contacting a TPA and not the insurance company themselves.
The process of understanding and analyzing the risks associated with insuring a person or entity is referred to as underwriting. This task is performed by an underwriter who decided whether or not to provide insurance to you based on their analysis.
Let’s say that you happen to be a high-risk individual. You have a couple of pre-existing diseases and you’ve claimed insurance on several occasions. Whenever an insurance company agrees to cover you, they are covering your financial risk. The amount that they can cover is determined by underwriters.
Underwriters understand and analyze the risks associated with insuring a person or entity through a process called underwriting. In this situation, they would analyze whether you can be insured or not. If yes, they will also recommend the ideal coverage amount and premium.
The waiting period is the time span in which the insured cannot claim the benefits of health insurance. For instance, the waiting period for pre-existing diseases in many policies is around 2-3 years.
You suffer from high blood pressure but you manage to find a health insurance policy that covers your pre-existing disease, woohoo! However, there’s a catch. As per your policy guidelines, you have to wait 2 years before you can make a claim for any treatment that occurs because of your high-blood pressure.
What this means is that even if you suffer from a stroke, or any disease that is remotely connected to your current condition before the waiting period is over, your insurance company is not liable to pay for the expenses. Unfortunately, waiting periods are a common clause in most policies. The best choice here is to look for one with no or a minimum waiting period for your ailment.