Common terminology in Health insurance

1. Cashless Claims: Insurers directly settle your medical bills with a network hospital, provided the treatment is within policy coverage. No upfront payment is required by the insured (except non-covered costs)​.

2. Pre-Existing Diseases (PED): Any medical condition or illness that the insured had before buying the policy. Coverage usually starts after a specified waiting period​.

3. Waiting Period: The duration from the start of the policy during which specific illnesses or pre-existing conditions are not covered. Common waiting periods range from 30 days for general claims to 2-4 years for PEDs​.

4. Sum Insured: The maximum amount payable by the insurer during the policy term. Expenses exceeding this limit must be borne by the insured​.

5. No-Claim Bonus (NCB): A reward for not making claims during a policy year. It usually increases the sum insured without additional premiums or provides discounts on renewal premiums

6. Co-Payment: A percentage of the claim amount that the insured agrees to pay out of pocket. For example, if the co-pay is 10%, the insured pays ₹1,000 on a ₹10,000 claim​

7. Room Rent Limit: Caps on room charges during hospitalization. Opting for a higher-priced room may result in proportional deductions on other claims​.

8. Daycare Treatments: Medical procedures requiring less than 24 hours of hospitalization (e.g., chemotherapy, cataract surgery). Policies often list covered daycare procedures explicitly​.

9. Restoration Benefit: Automatically reinstates the sum insured if it is exhausted within a policy year, subject to conditions. Particularly useful for family floater plans​

10. Domiciliary Hospitalization: Covers treatments at home if hospital admission isn’t possible due to medical advice or lack of hospital beds​

11. AYUSH Treatment: Coverage for non-allopathic treatments such as Ayurveda, Yoga, Unani, Siddha, and Homeopathy, if included in the policy​

12. Critical Illness Cover: Provides a lump sum payout upon diagnosis of serious illnesses like cancer, heart attack, or kidney failure. This cover is often an add-on or rider​.

13. Family Floater Policy: A single plan covering all family members under one sum insured. Cost-effective compared to individual policies for each member​.

14. Exclusions: Specific treatments, conditions, or situations not covered under the policy, such as cosmetic surgeries or self-inflicted injuries.

15. Claim Settlement Ratio (CSR): The percentage of claims settled by an insurer against the claims received. Higher ratios indicate reliability.

16. Portability: Allows you to switch your health insurance policy from one insurer to another without losing accumulated benefits like the waiting period for pre-existing diseases. It ensures continuity of coverage​.

17. Free-Look Period: A timeframe (usually 15-30 days) during which you can cancel your policy after purchase if dissatisfied. Premiums are refunded, minus certain charges​.

18. Top-Up and Super Top-Up Plans:

• Top-Up Plan: Provides additional coverage beyond the sum insured but kicks in only when a single claim exceeds a specified deductible.

• Super Top-Up Plan: Covers cumulative claims in a year once the deductible is crossed, making it more comprehensive than a regular top-up​.

19. OPD (Outpatient Department) Cover: Covers medical expenses like doctor consultations, diagnostic tests, and pharmacy bills without requiring hospitalization​.

20. Copay Clause: A mandatory sharing of treatment costs between the insurer and the insured, typically applied to senior citizen plans or treatments at non-network hospitals​.

21. Network Hospitals: Hospitals partnered with the insurer to provide cashless claim facilities. Selecting a network hospital minimizes out-of-pocket expenses during hospitalization​.

22. Policy Tenure: Refers to the validity period of the insurance policy, which can range from one year to multiple years. Multi-year policies often offer discounts on premiums​.

23. Riders/Add-Ons: Additional coverages you can buy with your base policy, such as:

• Maternity Rider: Covers maternity expenses and newborn care.

• Accidental Death Benefit Rider: Provides an extra sum insured in case of accidental death.

• Critical Illness Rider: Lump-sum payout on diagnosis of listed critical illnesses​.

24. Grace Period: The extra time (typically 15-30 days) provided to pay your premium after the due date without policy lapse. Claims are usually not honored during this period​.

25. Claim Ratio: Shows the percentage of claims approved versus total claims received by the insurer. A high claim ratio reflects efficient claims processing​.

26. Incurred Claim Ratio (ICR): The percentage of premium collected by the insurer that is used for settling claims in a year. It indicates the insurer’s profitability and reliability​.

27. Tax Benefits: Under Section 80D of the Income Tax Act, premiums paid for health insurance policies offer tax deductions:

• Up to ₹25,000 for self, spouse, and children.

• Additional ₹50,000 for senior citizen parents​.

28. Hospitalization Cover: Covers costs for treatments requiring at least 24 hours of hospitalization, including room rent, ICU charges, and surgery fees​.