Insurance jargons are at times confusing. Not just understanding of these terms along with the conditions help you know better the policy but to sustain an informed buying decision, it is important. In this regard, below is the guide to help understand various clauses associated with your health insurance policy?
As per the contract between the insurer and the insured, the health insurance plan reimburses the incurred amount during a hospitalisation. However, if the insured agrees upon to pay a certain percentage of the total bill, it is called as co-payment. Usually, most of the health insurance plans come with co-payment, in return of which the insurer charges a lesser premium. Most importantly, the sum insured remains as it is. For instance, under your HDFC ERGO Mediclaim policy, you are entitled to pay 10% of co-payment, which means 10% of the total medical bill will be on you and rest of the amount will be paid by the insurer.
This feature is common in senior citizen health insurance. When at the senior age the premiums are expensive, co-payments offers some relief as the insurer charges a little less with co-payment. However, some policies may ask for higher co-payment if treatment is done at a non-associated hospital.
Co-payment and deductible are kind of a similar term, the only difference is in case of the former the policyholder pays a certain amount of the hospital bill, while in the latter case, the insured agrees upon to a fixed amount to pay. It is of two types: Voluntary and Compulsory Deductible. The compulsory deductible is fixed and pre-decided by the insurer and it is compulsory for the insured to pay. While in case of the voluntary deductible, the insured can decide the amount as per the affordability.
As per the rule, before the insurance company pays for the claims, the deductible has to be paid. However, there is no reduction of sum insured even if you pay the deductible.
You may not find the existing health insurance adequate in terms of your requirements. Considering this, if you stop paying the premium or buy a fresh policy, you may lose on certain benefits such as the served waiting period for specific illness, or accumulated NCB. Mostly, health insurance comes with a waiting period to cover pre-existing or specific illness. If you’ve served 24 months of the waiting period and buy a new policy in the 25th month, the new policy will demand you to serve another 24 months of waiting period to cover specific illness, which can be avoided by porting the policy with another insurer.
Portability is a feature comes with health insurance, which allows the insured to switch the policy without losing the accumulated credit, or benefits with the existing policy. The only condition is there should be no break in premium payment. Hence, if you are not satisfied with the services offered under HDFC ERGO Health Insurance, you can port the policy without compromising on your earned NCB bonus.
When in most of the cases maternity is excluded, there may be some insurers that offer maternity benefit as an in-built feature. However, the maternity clause comes with a pre-defined waiting period. Plans with a lesser waiting period may charge a higher premium. Usually, pregnancy or childbirth-related expenses are usually a part of exclusion, however, one can opt this as an add-on benefit, along with the basic cover. Hence, if your HDFC ERGO Medical Insurance doesn’t include maternity, you can add this as an add-on cover by paying an extra premium.
Gone are the days you had to worry before taking health insurance with pre-existing illness. These days health insurers extend coverage even to those with pre-existing ailments as well. The only condition is one has to serve a waiting period of specific years and the policy is being renewed continuously.
Pre-existing illness means any health condition that is prevailing before you buy health insurance. Although the pre-existing condition is covered only after serving the defined waiting period, it is advised to disclose any such situation at the time of signing on the dotted line of the document. Non-disclosure may lead to claim rejection in the future.
If you have noticed, there is a mention of 'reasonable charges' on a hospital bill. The insurance providers are only liable to pay the reasonable charges not the exorbitant rate under any expense-head. This is, however, clearly stated in the policy document.
As the hospitalisation expenses tend to differ across cities and hospitals, the amount of ‘reasonable charge’ will also vary.
There is no hard-and-fast rule that you’ll have to stick to the insurer once you have bought the policy. There may be situations when might not feel the policy suitable to your requirements. What next? Well, you can call off the deal even now!
Every general insurance policy comes with a feature of a free-look period of 15 days, which allows the insured to return the policy if it is not satisfying. The day is counted from the date of receiving the policy. However, the free-look period is only applicable in the initial policy year. This clause is not applicable even after a single renewal. If it is the case with you, in order to cancel the policy, you’ll have to contact the insurer in writing and return the policy. The insurer will adjust the paid premiums on a pro-rata base or applying the terms ad conditions.
Grace period refers to a specific period offered to the insured to pay the premiums if he/she forgets the actual policy renewal due date. It is usually 30 days, however, it may differ from insurer to insurer.
There may be considerable insurance terms that can leave you in a state of mere confusion. But understanding these terms will help you deal with your policy even better. You can ask the insurance advisor anything that appears tricky and can remain aware of all these confusing terminologies. Stay Aware!
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