The increasing cost of healthcare treatment and the covid-19 pandemic this year has driven home the point of the importance of insurance. However, in-state the long list of jargon has deterred you from buying a health cover, we decode standard terminologies to make your purchase easier and help pick the right course.
Pre-existing disease means a disease, ailment, injury, or disease that is diagnosed within two years before acquiring a policy. The insurance company may agree to meet your PED at the usual premium but only following a waiting period, which cannot be higher than two years. However, instant coverage for your PED can appear at a higher premium. Some PEDs involve health issues related to thyroid, diabetes, and asthma, among others. However, several diseases such as HIV and cancer can be permanently banned. Individuals must avoid hiding any therapeutic condition from the insurance company at the time of purchasing policy as it may lead to rejection of the application.
Co-payment or co-pay means a cost-sharing basis that provides that the policyholder will bear a specified portion of the amount of the admissible claims. Co-pay is generally 10% of the sum insured, but it may vary from business to company. For example, under a co-pay of 10%, you have to spend ₹10,000 from your own pocket, if the claim advanced is ₹1 lakh. A co-pay discourages people from making additional claims. Higher co-pay means lower premium costs, but it may lead to higher out-of-pocket expenses. The treasure that co-payment does not reduce the sum insured.
A deductible is a fixed cost that the insured has to pay before their insurance policy starts contributing to their medical procedure. It can be for a year or through a procedure. For example, if you go for a deductible of ₹10,000, then you have to pay for your prescription costs up to ₹10,000, after which your policy will boot in. Deductible helps in reducing premiums, but it also raises the total value of medical treatment. Remember, that while co-pay is for specific healthcare assistance, a deductible is completed before the insurance policy starts contributing in a year.
A cumulative bonus means any improvement or addition in the sum insured granted by the insurer without an increase in premium, which means it is a premium for staying fit and not raising any claim. The type of benefit you take may vary from company to company. While some may reward you with a reduction in your premium on renewal, others may offer an additional sum insured.
According to Irdai, grace season is the time following the premium due date during which a payment can be made to renew or maintain a policy in force without loss of continuity benefits such as waiting periods and coverage of PEDs. The coverage is not possible for the period for which no premium is received. Duration of the grace interval changes with the type of payment options. While it is a month for yearly payment, it is seven to 15 days in monthly installment modes.
A complete understanding of the commodities available and in-depth research based on your needs is significant when buying insurance. Go for a best-rated health insurance plan to spare yourself from financial trouble climbing due to health issues or emergencies.