5 terms you must know before buying health insurance
What's the story
We all know that health insurance is no more a choice but a necessity in today's world.
However, the complicated terminology used in the industry can be a significant barrier for many people.
Do you know your deductibles from your copays? Don't worry, we have got you covered!
Here are five health insurance terms that you need to know before purchasing any policy.
Co-pay
Co-payment
Co-payment is a clause in some health insurance plans where you have to pay a part of the bill yourself when you make a claim.
It is usually a certain percentage of the amount you are claiming, like 30%.
So, if you are claiming Rs. 50,000 and your co-payment is 30%, you will have to pay Rs. 15,000 from your own pocket.
Deductibles
Deductibles
Deductibles refer to the initial amount that you must pay out of your own pocket before your insurance provider begins to cover medical expenses.
For example, if a policy has a deductible of Rs. 10,000 and a claim of Rs. 30,000 is made, the policyholder will pay the first Rs. 10,000, and the insurance provider will pay the remaining Rs. 20,000.
Waiting period
Waiting period
The waiting period is the duration in which specific ailments are not covered under health insurance policies.
There are three types of waiting periods: initial waiting period (30-90 days after buying the policy), waiting period for pre-existing diseases (1-4 years), and waiting period for specific ailments (1-2 years).
Claims made during this period will not be accepted unless it is due to an accident.
Refund
Free-look period
A free-look period is a window to review your health insurance policy and return it if it doesn't meet your needs.
The period usually lasts for 15 days from the date of receiving the policy documents; some insurers may offer up to 30 days.
If the policy is returned during this period, the insurer will refund the premium paid, deducting a specific amount.
NCB
No-claim bonus (NCB)
Insurers give a cumulative bonus, also known as NCB, if you don't make any claims during the policy period.
Usually, your insurance coverage is increased by 50% after you spend the first two successive years without making any claims.
This can go up to a maximum of 100%.
The type of NCB offered and the discount rate provided vary from one insurer to another.
Renewal
Grace period
A grace period is an extension provided by the insurance company in case you forget to pay your insurance premium on time.
It is usually 15 days, but some insurers provide 30 days too.
However, during this period, you will not be entitled to any coverage and will not be able to register a claim unless you renew your insurance within the grace period.