10 Important Health Insurance Terms You Should Know

 

The importance of health insurance is growing each year. As the panic of the Corona pandemic has shown us, health is truly more important than anything. A good health insurance plan will ensure that your savings stay saved while you get first-rate and focus on recovery when a health crisis strikes. For this reason, you must choose a plan that suits your budget and coverage needs. However, like most insurance policies, health insurance has a set of jargon that can confuse a potential policyholder. 

 

To help you out, we are explaining 10 important health insurance terms in this article that will hopefully help you in the process of choosing a good insurance policy. Let’s take a look. 

 

 1.Pre-existing diseases/conditions

 

The diseases or conditions that the policyholder has prior to purchasing the health insurance plan is referred to as pre-existing diseases. Usually, such diseases are excluded or there is a waiting period before they are covered. 

 

2. Deductibles

 

It is the amount you are expected to pay out of your own pocket as a part of the treatment expenses when you raise a claim.

 

3.Cashless treatment 

 

When you opt for cashless treatment at a hospital and raise a claim, the payment for the same will be handled between the hospital and your health insurance provider. You will only have to pay for the deductibles. 

 

4.Network hospitals

 

The hospitals that are affiliated with your health insurance provider are referred to as network hospitals. Availing treatment at these hospitals gives you the benefit of cashless treatment. 

 

5.TPA

 

The TPA or the Third-Party Administrator is sort of an intermediary between you and your health insurer. The primary functions of a TPA include claim settlement and processing, besides providing administrative assistance to the insurer and guidance to the insured. 

 

6. Inpatient and outpatient treatment

 

Inpatient care refers to the treatment that you receive as an officially admitted patient in a hospital. Outpatient treatment refers to processes such as day-care procedures, diagnostic tests, visits to doctors as a part of treatment, health check-ups, and so on. Most health insurance plans cover inpatient treatment once the patient has been hospitalized for a particular amount of period. 

 

7. Indemnity based plans

 

A health insurance plan that works on an indemnity basis provides you financial aid when you raise a claim according to the expenses you have incurred for your treatment. You will have to provide hospital bills and relevant payment documents and the insurer will pay for the same amount, not exceeding the sum insured 

 

8. Benefit based plans

 

Health insurance benefit plans provide the policyholder with a lump sum pay-out instead of reimbursing the bills or paying for cashless treatment. The policyholder may use this lump sum payment as they wish. While some policies make the payment on the diagnosis of the covered illness, some may wait till the policyholder completes a pre-decided period of hospitalization.

 

9.  Family floater policy 

 

A type of health insurance plan that allows you to include several members of your family under a single sum insured and single payment of premiums. 

 

10. No claim bonus 

 

If you do not make any claims during your policy period, then you are eligible for ‘No Claim Bonus’ which means that you get a bonus or rather a discount on the Mediclaim policy premium. This bonus keeps getting accumulated every year that you do not make a claim. 

 

The terms and conditions of health insurance policies differ from insurer to insurer. You are advised to read the policy wordings carefully before investing in any health insurance policies.