Do You Know Your Health Insurance Basic Terms?

Buying any insurance policy is something that makes a lot of first-timers feel confused. There are plenty of terms and jargon associated and having a general idea about them is essential. A lack of awareness might lead to you choosing an incorrect policy. When it comes to buying a health insurance policy, you must compare the basic details. If you don’t want to end up with an expensive or less effective policy, you must gather some knowledge about the basic terms. So, take a look below and get familiar with some of the most important terms.

• Premium: Like any other insurance policy, a premium is an amount you pay every month/year to keep the policy active. Most

health insurance companies charge yearly premiums. You can, however, opt for a monthly or quarterly payment system too. At the time of comparing insurance policies, you need to focus on the premium amount.

• Deductible: It is the amount you agree to pay before your policy coverage kicks in. This amount is usually decided by the insurance policy provider. But, you can get it customized as well. For example, if you choose?1,000 as your health policy’s deductible amount, then at the time of making a claim you will have to pay?1,000 from your pocket. Once the amount is paid by you, the insurance company will release the coverage amount. The higher the deductible is, the lower the premium will be.
• NCB or No Claim Bonus: This is a discount you can get at the time of renewing your existing policy. It stipulates that if you do not make a claim during your current policy period then you are eligible to get some discount on your next policy premium.
• Exclusions: Almost every

health insurance policy comes with a set of exclusions. These are the medical or health conditions that will not get covered by your insurance policy. For example, critical illnesses like cancer and kidney failure are not covered by the majority of the basic policies. You can include them by purchasing add-ons.

• Sum insured: This is the maximum amount of cover you get from your insurance provider. If your policy’s sum insured is?3 lakhs and your hospital expenses amount to?4 lakhs, you will have to pay?1 lakh from your pocket. At the risk of stating the obvious, choosing the right amount of sum insured is important. If you are in your 50s then, considering the higher health risk, it is better to opt for a higher sum insured value.
• Cashless benefit: Health insurance policies that offer cashless benefits are more popular these days. These policies settle your medical and hospital bills directly with the healthcare service provider. It skips the process of you having to make a payment upfront and file a claim to reimburse the same.
• Network hospitals: When comparing insurance policies, this is an important consideration that is often overlooked. Every insurance company has a tie-up with several hospitals and nursing homes. When you avail services from any of the network hospitals then you are offered a number of benefits.

Those are some of the key concepts related to health insurance policies. The above points would be a handy list of terms that you should discuss with your insurance agent when comparing policies from different insurance companies. It will ensure you get better at choosing the right policy for your needs.

I am Dipti Goel, Working in Digital Marketing Field from last 5 years. Expert in Finance field.