Important terms used in your health insurance policy

To understand the offerings of a health insurance policy, it is important to know the meaning and definition of the commonly used health insurance terms. We have defined here some health insurance key terms to help HDFC ERGO’s customers make an informed decision.

Premium

This is the amount you pay annually towards your insurance plan.  The higher the coverage, the more will be the premium amount and vice versa.

Deductible

This is the expense you will have to bear before the insurance company begin paying towards the cover expenses. It is always a good idea to buy a policy with lower or no deductibles.

Pre-existing Conditions

It refers to any existing illness or injury you have during or diagnosed, treated within 48 months prior to getting the insurance plan.

Beneficiary

It refers to the person to whom the benefit of the insurance policy will be passed on in case the policyholder dies while on the insurance plan.

Floater Policy

It is the policy where all the members of a family are covered under one insurance policy with a single sum insured. The policy can be used by any family member for any number of times till the maximum sum insured value is reached. 

Claim

The process of reaching out to the insurer for reimbursement of the expenses incurred by you during medical treatment is called as ‘filing a claim’.

Cashless Claim

This is the process of insurance claim where the insurance companies pay directly to the hospital. The important condition here is that the insurer gets treated only in one the specified network hospitals.

Cumulative Bonus

In case of claim-free renewal, an additional Sum Insured called as Cumulative Bonus (CB) gets accumulated to one’s renewed policy. Cumulative Bonus can range from 5% to 10%.

Domiciliary Hospitalization

This is the term used when the treatment of the patient is carried out at home instead of a hospital. Most health insurance policies cover domiciliary hospitalization if it is as per the doctor’s recommendation.

Exclusions

It refers to the diseases, conditions, treatment, and other medical expenses which are not covered by a given health insurance policy. Exclusions are of two types. One is permanent exclusion and the other is an exclusion for certain expenses for a pre-determined waiting period.

Conclusion

If there are any health insurance terms you do not understand, make sure you search online and understand it before coming to any decision.

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

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