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Complete Awareness of Health Insurance Terms and Things to Look for in an Ideal Health Plan

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Published on April 7, 2021. EST READ TIME: 3 minutes

By availing of health insurance, medical, surgical and prescription drug payments are covered for the insured. Such insurance programs either reimburse the insured for any expenses they incur in the event of an illness or injury or they pay the health care provider directly. Prior to investing in health insurance, it is vital that individuals consider what sort of a plan would benefit them the most.

Terms to Understand -

Health insurance documents can be verbose and unless individuals are familiar with the terms mentioned, information available might not make much sense. The following terms are found scattered across health insurance documents.

➔ Assignee (or policyholder) refers to the individual who avails benefits from the insurance policy.

➔ Claim refers to the payment request filed by the assignee, such that the insurance company pays their mentioned medical expenses.

➔ Co-Payments refer to the cost-sharing requirement wherein the policyholder agrees to pay a certain percentage of the hospital bill. By agreeing to such terms, they are charged a lower premium.

➔ The fixed amount a patient must pay each year until their health insurance benefits begin to cover such costs is called a deductible. This amount is either fixed or a percentage of the claim amount. The insurance company can’t be expected to cover this amount and expects the policyholder to do so.

➔ Long-term disability insurance provides incapacitated or disabled policyholders with a payment of a percentage of their monthly income.

➔ Grace Period covers the 15 days following the expiry of the due date of premium payment. During this time, policyholders can pay to renew or continue a policy without losing existing benefits such as coverage of pre-existing diseases. However, coverage isn’t available for the delayed period from the due date. This fact reinforces the importance to keep renewing health insurance as and when its premium is owed.

➔ Pre-existing disease includes any condition, ailment or injury for which the policyholder experienced symptoms / was diagnosed or received medical advice within 48 months prior to availing of the first policy issued by the insurer. If the issuer fails to mention this, their insurer may choose to reject their claim.

➔ Waiting period is the time during which certain benefits of a given policy might not be available to the insured. This period generally comes into effect when individuals avail of a new health insurance policy.

What to Look for in an Ideal Health Insurance policy -

An ideal health insurance policy is subjective and depends upon a number of factors pertaining to a given individual. Individuals must identify and buy health insurance that covers their top requirement. There presently exist a number of health plans that different age groups, family structures and cater to people with specific diseases. Understanding what sort of health insurance an individual needs most direly can help them select an appropriate plan. For instance, expectant mothers may select health insurance pertaining to maternity and childbirth.

Individuals must read the fine print and determine exactly how much coverage is available for a given health insurance plan. This includes in-patient hospitalisation, day-care treatment, room rent allowance, pre and post hospitalization expenses and sub limits for certain expenses and treatment. Additionally, individuals must understand the plan or policy’s waiting period, co-payment and exclusions such that they aren’t caught unaware in the future. Exclusions refer to medical conditions and / or expenses which aren’t included in a given plan and needs to be paid for, by the individuals.

Finally, when selecting appropriate health insurance, individuals must look for and identify plans which enhance their coverage over time. These include those which offer no claim bonuses and restoration. The former refers to rewards provided by insurers for not availing any claims for a given year. These rewards usually increase the amount of sum insured while not altering the premium level. Restoration restores the sum insured after it’s been used along with the cumulative bonus within a year due to any hospitalisation or ailment.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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