Decoding Health Insurance Jargon: A Guide for the Layman
Being a technical domain and a legal contract, Insurance terms are often difficult to understand for most. Moreover, terms and conditions and insurance specific jargons add to the misery of a layman when it comes to insurance contracts. This more than often poses as a stumbling block in creating awareness about insurance.
Here are the most commonly used health insurance terms de-jargonized to help you in making informed decisions.
Health Insurance Jargons
Co-payment
Co-payment refers to the option of sharing a pre-defined percentage of claim amount between the insured and the insurer. Exercising this option helps in lowering premiums while purchasing a health plan. 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 INR 1, 00,000 you have to bear a sum of INR 20,000 (20% of INR 1, 00,000) from your own pocket while the insurer will take care of the balance amount of INR 80,000.
Deductible
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 INR 10, 000/- in your policy, then in case of a claim worth INR 1, 00,000 you will have to bear the first INR 10,000 while the balance of INR 90,000 will be taken care of by your insurer. If the claim amount is below INR 10,000 then the customer has to bear entire expenses.
Day Care Treatments
These refer to medical treatments or surgical procedures performed with less than 24 hours hospitalization, 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. A complete list of Day care procedures can be requested from your insurer and is also available on the IRDAI website.
Cumulative Bonus (CB)
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%. Now a days there are products available with CB going up to 100% of Sum Assured.
Grace period
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 hospitalization is called as post-hospitalization medical expenses, which includes follow-up medications, tests, physiotherapy exercises, dialysis, chemo 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:-
Personal Accident policies are benefit policies that pay a lump sum amount in case of any accident related disability or death.
Permanent Total disability or PTD
When an insured is unable to carry on with the responsibilities of their occupation or is rendered incapable of finding further employment of similar nature due to an irreversible and permanent disability like amputation of both the legs and hands or total loss of vision, the claim 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 TTD. The injury or condition 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 from date of receipt of policy document, 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 administrative expenses, while being covered.