A Jargon Buster for Your Health Policy

Picking the right health insurance policy is not easy. There are so many things to take into consideration and a typical health insurance policy document does not make it any easier.

A thirty-page document filled with medical jargon can be quite intimidating. Having to Google search every other word makes a lot of us give up and ignore the policy document until we are dealing with hospitalisation or filing for a claim. And guess what, it might be too late by then.

To make your life a little easier, here’s a breakdown that’ll help you understand some of the most important terms mentioned in your health insurance policy. 

Sum Insured

Sum insured is the overall claim limit. This is the maximum amount your insurance company will pay towards your medical expenditure. Any medical expenditure exceeding this will have to be borne by you.

The sum insured resets in the next year and your claim limit will be back to your original amount.

Did you know that your insurance policy may have defined sub-limits within the overall sum insured. Like capping of daily room rent, ICU charges or diagnostic tests.

Which means that even if you're insured for a higher amount, sub-limits can restrict your claim reimbursement.

Restoration Benefit

Once you file a claim, restoration benefit is a feature that allows restoration of your sum insured, either fully or in part within the current period. Not every policy has this by default.

A restoration benefit might have further conditions. For instance, a waiting period to file a claim for the same condition which exhausted your original sum insured. Some policies might allow restoration benefit to be multiple times your sum insured in case of accidents.

Co-payment

An insurance policy with co-payment is when you and the insurance company agree that for every medical claim, you will co-pay a percentage of the total bill.  You can opt for this if you want to reduce the premium you have to pay.

For example, in a plan with 20% co-payment, for every 100 rupees of claim you register, the insurance company pays Rs. 80 and the remaining Rs. 20 is paid by you.

No Claim Bonus

A No Claim Bonus (NCB) is an enhancement of your overall sum insured from the second year onwards. This enhancement is provided only if you do not make any claims in the previous year.

Make sure you renew your insurance before it expires, or at least within the grace period to be eligible for a No Claim Bonus. 

Waiting Period

Once you get your policy, you can’t log a claim the very next day. There are two tiers for waiting periods involved.

First, there’s an overall waiting period of about 30 days. You will not be allowed to make any claim whatsoever during this time.

There are also longer waiting periods for claims related to specific health conditions (also called Pre-Existing Diseases or PED) or certain surgical procedures. This is typically in years. Insurance providers have this in their set of clauses so that insurance buyers with pre-existing conditions do not exploit the policy.

Hospitalisation Expenses

Typically, hospitalisation is when you have to be admitted to a hospital for more than 24 hours. Most insurance policies have a specific list of procedures and treatments that is covered for when the patient is hospitalised as compared to out-patient (or daycare) treatments.

Network vs Non-network Hospitals

Every insurance provider will have a network of hospitals. Benefits and coverage differ between network and non-network hospitals.

For instance, some procedures might be covered only at network hospitals. Network hospitals might have arrangements with your insurance provider to enable cashless treatment, where the claims are settled directly with the hospital.

Pre & Post Hospitalisation Cover

Your medical expenditure will usually be high just before and after hospitalisation. Insurance policies recognise this, and provide cover for certain diagnostic tests and post hospitalisation medications as well.

Home Healthcare and Domiciliary Treatment

Certain conditions like mild to moderate COVID19 can be treated at home with minimum medical assistance or hospitalisation. However, you may need to buy certain medical equipment for this as well. These costs are covered under Domiciliary treatment.

Make sure that you read which treatments and conditions are covered by your policy under this category, especially if your policy includes elderly people.

How to choose the right policy?

At ERB, we believe that you need to have a complete understanding of the policy document in order to make an informed choice. But the terminology in your policy document is usually not easy to make sense of. That’s why we can help you simplify your health policy. 

If you need help decoding your policy, you can upload your policy document here and our insurance experts will send you a simple report to tell you what your policy covers and how well it can protect you. Stay safe. Stay protected.