Health Insurance Glossary

Agent: He is a person appointed by the insurer to work on behalf of the insurer.

Assignee: It is that person who gets the benefits of a policy.

Claim: A request filed by an insured to the insurance company to pay for services obtained from a health care professional.

Certificate of Insurance: The description of the benefits and coverage provisions forming the contract between the carrier and the customer. Discloses what is covered, what is not and the cash limits.

Co-payment: When the insured files a claim, there is a certain out-of-pocket fraction of the claim amount he has to bear himself before the insurer steps in. This fraction is known as co-payment. Co-payment is shown as a percentage of the total claim amount.

Cumulative Bonus: Cumulative bonus is similar to no claim discounts. For every claim free year, the sum insured will progressively increase by 5%. However, the cumulative bonus is subject to an amount that can never exceed 50 per cent of the Capital Sum Insured and that the policy was renewed continuously.

Deductible: The amount of loss borne by the insured. This loss can be a certain money amount or a percentage of the claim amount. Bigger the deductible, lower is the premium.

Dependents: Spouse and/or unmarried children (whether natural, adopted or step) of an insured.

Exclusions: These are those conditions or circumstances for which an insured will not be given any benefit.

Insurer: The insurance company that assumes responsibility for the risk issues insurance policies and receives premiums.

Long-Term Care Policy: Insurance policies that cover specified services for a specified period of time. Long-term care policies (and their prices) vary significantly. Covered services often include nursing care, home health care services, and custodial care.

Long-term Disability Insurance: Pays an insured a percentage of their monthly earnings if they become disabled.

Premium: The monthly amount that you or your employer pays in exchange for insurance coverage.

Policy: It is a legal document, which acts as a contract between the insurer and insured. It contains conditions of the insurance.

Pre-existing condition: A medical condition of an individual is excluded from coverage if the condition is believed to have existed prior to obtaining the policy from a particular insurance company.

Network: A group of doctors, hospitals and other health care providers contracted to provide services to customers of the insurance companies for less than their usual fees. Provider networks can cover a large geographic market or a wide range of health care services. Insured individuals typically pay less for using a network provider.

Sum Insured: Sum insured is the payout amount that the insurer is liable to pay to the insured in case of an eventuality. It works on the principle of indemnity. For e.g. the sum insured is Rs 3 Lakh under health insurance and if the insured gets hospitalized and his expenses turn out to be Rs 2 Lakh, his insurer is liable to pay him Rs 2 Lakh.

Waiting period: When an individual signs up for a new health insurance policy, there is a fixed period of time after which certain benefits of the policy come in effect. For e.g. the usual waiting period for pre-existing conditions is 4 years.