The A-Z of Health insurance in India

If you are buying a health insurance policy, you will come face-to-face with several offered documents. These documents include vital information regarding your coverage, including special terms and conditions. You need to read and understand each of these points to assess the quality and extent of financial protection offered.

However, some of the health insurance terminology can be tricky to understand. Without proper comprehension of your policy details, you can make serious mistakes. You may end up with compromised financial aid during medical emergencies.  

Only when you know what these common healthcare terms signify can you hope to make a comprehensive decision regarding choosing a healthcare provider and cover.

A

• Accumulation Period - This is referred to as a period just after purchasing a health insurance plan when the policyholder is ineligible to claim any cover from the policy (except accidental cases). Instead, any expense he/she incurs during this time goes toward satisfying a deductible, if applicable. In most cases, the accumulation period is 30 days from the day of health policy purchase.
• Acute Care - Any medical care that the policyholder undergoes at a hospital or under professional nursing care is considered acute care. Such treatment is generally temporary rather than being chronic.   
• Agent - An agent refers to an intermediary that connects consumers with insurance providers. As a customer, you would often interact with your agents regarding the healthcare policy. These agents help you learn the various features and benefits related to your insurance plan. Moreover, they can also assist in correctly filing and processing your health insurance application forms. Nevertheless, agents will try to highlight the positive aspects of a policy. 
• Age Limit - Every health insurance plan comes with minimum and maximum age stipulations. Policyholders who fall within the determined age range are liable to apply for that health insurance policy, while others are ineligible. 
• Any One Illness - This health insurance terminology refers to a continuous period of illness. This may include a relapse in the illness within 45 days of the last consultation.
• Area Covered - Your health insurance policy only covers you in certain locations. Some plans only offer coverage within India, while others may also provide financial assistance for medical emergencies abroad. 
• Ambulance Cover - Some health insurance policies cover the cost incurred when transporting the policyholder to the hospital in an ambulance. Such additional charges involved with hospitalization can put a dent in your pockets if your insurance policy fails to offer coverage for the same.
• AYUSH - Today, individuals seek alternate forms of therapy as well as conventional treatment. Ayurveda, Homoeopathy, and many other avenues of remedy are considered alternate treatments. Collectively, they are known as AYUSH. Some health insurance policies offer coverage for expenses incurred due to hospitalization for seeking such treatment under the AYUSH add-on cover.

B

• Beneficiary - The beneficiary is an individual or entity that has been named in the policy as the insurance benefit recipient on the event of the policyholder’s death.
• Bodily Injury - Bodily injury refers to any physical harm that you can be subjected to due to unforeseen, unexpected, violent and visible means.
• Broker - An insurance broker is a third-party individual or company who will deal with the insurance provider on your behalf. The main difference between a broker and an agent is that unlike an agent, the broker is not employed by the insurance company.

C

• Cancer Insurance - Cancer insurance refers to a supplemental form of protection that only kicks in when you are diagnosed with cancer. Such a cover will help mitigate the costs involved with the treatment of cancer. You can purchase cancer insurance plans as standalone policies or as an add-on for an existing healthcare cover.
• Claim - A claim is a financial benefit that you receive from your health insurance policy during a healthcare emergency or hospitalization.
• Claim Settlement - The process of acquiring the claim money is claim settlement. The insurance provider generally has two modes of claim settlement. The first is the reimbursement process, where you pay for the treatment and file for reimbursement of the expense at a later date. The other is a cashless claims process, where the insurance company directly settles your medical bills with the network hospital.
• Claim Settlement Ratio - Claim settlement ratio refers to the portion of claims that an insurance provider settles in a year against the total number of claims it receives. Considering the claim settlement ratio is important before picking your insurer, as it reveals whether your insurance provider is likely to settle claims easily and reduce the risk of your claim being rejected.
• Certificate of Insurance - No health insurance glossary is complete without knowing about the certificate of insurance. Also known as the policy underwriting, this basically refers to the contract paper that lists down the inclusions, exclusions and cash limit for your health insurance plan. Each provider has separate terms and conditions. Ensure you read this certificate carefully to understand all the features and benefits of your health cover.
• Co-payment - Co-payment refers to a portion of the claim amount that the policyholder needs to pay out of his/her pockets while the rest is covered by the insurance provider. Therefore, the expense incurred during treatment is divided between the policyholder and the respective insurance company. Plans with co-payment clause list this liability as a percentage. Before opting for a co-payment policy, make sure you understand the financial liability such a plan puts you through in case of medical emergencies.
• Complimentary Health Check-ups - Health insurance companies provide free yearly check-ups to policyholders as a perk for renewing their health insurance plan. Some plans may cover costs for full-body check-ups, while others allow the insured to undergo certain medical tests free of cost. 
• Co-insurance - Co-insurance is the fixed percentage of treatment costs that the policyholder has to bear out of his/her own pockets, while the rest is covered by their health insurance policy. Co-insurance can be of two types - compulsory and voluntary co-insurance and usually increase the payment liability of policyholders while raising claims.
• Cumulative Bonus - Cumulative Bonus is the bonus your health insurance plan accumulates over successive claim-free terms. For instance, if one-claim free year results in an increase of the sum insured linked to the plan by 5%, and you experience 5 successive claim-free years in a row, your accumulated bonus is 25%.
• Critical Illness - Any severe, life-threatening or chronic condition requiring substantial medical assistance is classified as a critical illness. Standard health insurance policies do not offer adequate financial protection against such conditions. Therefore, insurance providers offer an additional safeguard in the form of standalone or riders. You can avail the critical illness benefit for all-round protection.

D

• Daycare Procedures - Daycare treatment is nothing but a procedure that requires hospital or clinic admission. However, the admission does not last more than 24 hours, thereby disqualifying it from traditional healthcare coverage. Treatments like chemotherapy, dialysis, angiography, etc. are some of the examples of day care procedures. Only the health insurance schemes that cover daycare treatments reimburse you for the expenses incurred for undergoing the same.
• Daily Hospital Cash - Also known as Daily Hospital Cash benefit, this is a specific cover that offers a fixed monetary payout for each day the policyholder remains hospitalized. The exact amount is determined when purchasing the policy. Daily cash is available as a standalone cover and as a rider for standard healthcare policies.
• Deductible - This is the fixed amount of medical expenses that a policyholder needs to pay each year to file a claim with the insurance provider successfully. Keep in mind that deductible refers to a fixed amount and not a percentage of the total expenses. Suppose your deductible amount is Rs. 10,000 per year. In such a case, you can only claim the policy benefits after you have paid Rs. 10,000, the deductible amount, in any given year for your medical treatments.
• Dependents - Some health insurance plans do not restrict coverage to the policyholder only. Instead, they extend the protection to the policyholder’s spouse, children and, in some cases, dependent parents. These additional individuals eligible for protection under the policy are known as dependents.
• Domiciliary Hospitalization - Any medical treatment that policyholders receive at their home under professional care is known as a domiciliary treatment. In such cases, the patient cannot be taken to the hospital due to their inability to leave the house.

E

• Exclusions - Any disease, condition or medical treatment that your insurance plan does not cover is listed as the policy’s exclusions. Do not forget to check the exclusions when opting for a health insurance policy. This list generally differs from one insurance provider to another.
• Emergency Care - Any medical treatment that is required immediately due to unforeseen emergencies falls under the purview of emergency care. Generally, such conditions involve severe and serious injuries or illnesses, where delayed treatment can result in complications or even death of the patient.

F

• Family Floater Policies - A single health insurance plan that covers the medical treatment expense for more than one member of the family for a pre-determined sum insured is a family floater policy. Apart from the primary policyholder, additional members under this policy may include their spouse and children. Under a family floater policy, each member covered under it share a single sum insured amount.
• Free Look Period - Free-look period refers to a specific period of time during which a policyholder is free to look for other insurance providers without incurring any penalties or additional charges. Generally, the free look period extends up to 10-15 days from the date of the health insurance plan purchase. 

G

• Group Health Insurance - Group health insurance policies offer coverage to the employees of an organisation. These policies usually come at a lower cost than that of individual policies since the risk of the insurance provider is spread across a group of policyholders.

H

• Hospitalization - Hospitalization refers to the instances when you are admitted to a hospital for seeking treatment. However, you must remain at the facility for at least 24-hours to qualify for hospitalization benefits from your health insurance plan. Keep in mind, hospitalization is divided into two types, namely illness-related and accidental.
• Health Insurance Tax Benefits - Health insurance policyholders are liable to receive certain tax exemptions as per Section 80D of the Income Tax Act, 1988. The exact tax deduction depends on three factors – your age, the premium payable for your plan, and whether it is an individual/family health policy. Senior citizen policyholders generally receive greater tax exemptions under this Section.  

I

• ICU Room Rent - ICU room rent is the charge you are liable to pay for each day of stay in an ICU room. A healthcare policy may or may not provide reimbursement for ICU room rent since it is significantly higher than that of other rooms.
• Insurer - Insurer refers to an insurance providing company that provides financial assistance for the medical expenses incurred by their policyholder.
• IRDA - The Insurance Regulatory and Development Authority of India or IRDAI was established in 1999. The IRDAI regulates and promotes the insurance industry in India. Therefore, all insurance companies, agents and brokers must work under the compliance of the IRDAI.
• Insured/Insured Person - An individual or group covered under a health insurance policy are known as it's insured. An insured can file a claim on the event of hospitalization or other healthcare needs.
• Individual Health Insurance - Any health insurance plan that offers financial assistance to a single individual on the event of medical emergencies is an individual health insurance policy.  

L

• Life Insurance - Life insurance plans are completely separate from health insurance policies. Where your healthcare provides financial assistance to facilitate proper treatment for diseases/accidental injury, a life insurance plan offers a lump sum payment to your dependents/nominee on the event of your death. 

M

• Maternity Insurance - This is a unique health insurance add-on suitable for pregnant women, women undergoing childbirth and their new-born. With this cover, the insured can avail coverage for expenses incurred for child delivery, pre and postnatal expenses, etc. Such coverage also comes with waiting periods after which the insured individual can avail the policy benefits.  

N

• Network Hospitals - Any hospital or nursing home that provides cashless treatment under your health insurance provider is known as a network hospital. Seeking treatment at network hospitals is beneficial, as policyholders can enjoy cashless claim facilities at the hospital’s billing department.
• Non-network Hospitals - Your insurer does not collaborate with every hospital or clinic. These institutions that do not have any association with your insurance provider are non-network hospitals. If you seek treatment from such hospitals, you cannot avail cashless claims. Instead, you will need to rely on reimbursement claim procedures. 
• No-Claim Bonus - No-Claim Bonus is the benefit that is extended by insurance providers to policyholders for every non-claim year. With this benefit, policyholders can avail a higher sum assured at the same premium in the consecutive succeeding year. 

O

• Outpatient Department Treatment (OPD) - If the insured individual visits a clinic or healthcare centre for diagnosis and treatment, without resorting to hospital admission, it is known as OPD treatment. 
• Learn more about Health Insurance with OPD Cover

P

• Premium - You must pay a certain amount to your insurance provider to avail the health insurance coverage. Generally, charged every year, such insurance-related payments are known as its premium.
• Personal Accident Policy - These are specific plans that only come into effect when the insured suffers from a catastrophic accident. To raise claims against such a policy, the beneficiaries must meet certain prerequisites. For instance, most personal accident plans offer a fixed payout in the case of permanent disability or death of the policyholder.
• Policy Coverage - This is the term that is used to denote what is covered and what is excluded from the policy. Insured individuals can only avail benefits for the instances that are included under the policy coverage.
• Policy Period - Refers to the tenure for which the policy coverage is valid.
• Portability - Portability is the facility of health insurance policies whereby you can shift insurance providers. If you are unhappy with your current insurer, ensure you apply for an insurance port after picking an alternate provider.
• Pre-existing Disease - Any disease or health condition that the policyholder already suffers from at the time of health insurance purchase is termed as a pre-existing condition.
• Pre and Post Hospitalization Coverage - Your need for financial assistance does not end with the hospital stay. In some cases, patients start incurring huge medical bills long before hospitalization. If your insurance provider reimburses you for medical expenses up to 30 days prior to hospital admission, it is known as pre-hospitalization. Similarly, if the insurance company covers medical expenses up to 60 days after hospital discharge, it is known as post-hospitalization coverage.
• Psychiatric Cover - A few years ago, mental illnesses were not covered by health insurance policies. However, as per a 2018 directive by the IRDA, psychiatric cover provisions are now included in some health plans.

R

• Refill Sum Insured - Your policy sum insured can run out when you file claims with the insurance provider. With the refill or reload facility, your exhausted sum insured is reinstated. However, certain conditions apply. For instance, the sum insured that got refilled cannot be utilised to cover the cost of treatment of the same disease as before. Further, the entire sum insured must be exhausted for this facility to come into effect. Partial exhaustion is not liable for recharges or refills.
• Restoration Benefit - This is just another name for sum insured refill. Such a clause in your insurance policy leads to the reinstatement of your sum insured once it is exhausted. 
• Room Rent - Room rent refers to the per-day cost of a room in hospitals and clinics. Room rent varies with the treatment institution. Some hospitals may charge considerable room rent, while others charge a lower amount. Most health insurance plans cover room rent.
• Riders - Riders, also known as add-ons, refer to additional protection that policyholders can avail from their health insurance provider. For instance, maternity cover, AYUSH, etc. are some of the instances that are not normally covered under healthcare plans. You need to bear additional premium payments to incorporate coverage for these.
• Renewal - Renewal is the process through which a policyholder can prevent the expiry of their existing health insurance policy and consequently stop the benefits offered under the policy from lapsing. They simply need to pay the yearly premium once again to keep availing its benefits, before the policy expires.
• Reimbursement - Your health insurance vocabulary is incomplete without a proper understanding of reimbursement. If you decide to seek treatment at non-network hospitals, you would need to clear the entire medical bills from your pocket. Later, you can file a claim with your insurer to receive reimbursement for the treatment. 

S

• Sum Insured - The sum insured for your health insurance plan refers to the maximum financial coverage in a year offered under the policy. Also known as sum assured, it reflects the true value of your policy. The policyholder can choose the coverage amount while signing up for the policy. The premium payable for the policy is decided on the basis of the sum insured amount.
• Senior Citizen Health Insurance - Some healthcare plans are available to suit the needs of policyholders aged over 60 years and below 70 years. These policies are designed to suit the needs of senior citizens and offer benefits like domiciliary care coverage, AYUSH cover, psychiatric treatment coverage, etc. However, you must be eligible for the same under the policy’s terms and conditions. 

T

• Terminal Illness - Terminal conditions or illnesses are those diseases that cannot be cured. In such cases, the condition is expected to get progressively worse until the death of the patient. Advanced heart conditions and end-stage cancers are some common examples of terminal illnesses.
• Term Insurance - Term insurance is a life insurance plan, valid for a specified period. It does not have any association with your healthcare. Simply put, a term insurance plan secures the financial future of your family after you are gone.
• TPA - TPA or a third-party administrator refers to a special department at every hospital and healthcare facility where you can submit your health insurance details to file a claim. Whether it is a cashless or reimbursement claim, submitting insurance documents at the hospital’s TPA is a vital step of the process.  

W

Waiting Period - Waiting period is the time that policyholders need to wait before they can file a health insurance claim after policy purchase. For pre-existing diseases, the waiting period is generally set at 4 years, while for other conditions, the waiting term is shorter. 

Z

• Zone - Zones are a systematic division of health insurance policies according to the residential location of a policyholder. Health insurance providers have divided various cities into different zones based on the cost of treatment there. For instance, Zone A includes cities like Delhi and Mumbai where treatment costs are the highest, Zone B includes cities like Bangalore, Kolkata and other such metropolises while Zone C includes all other cities in the country.  Your zone determines the premium payable for health insurance plans.