The ABC Of the Insurance World

The ABC Of the Insurance World

As we all are mortal human beings, we all are prone to different types of diseases. But, even knowing so, we ignore the fact of how buying health insurance is very crucial for our well-being. Especially in India, with a hectic work schedule, unbalanced eating habits, and a sedentary lifestyle, it always affects our health, creating a negative impact on our body.

Although we can recover from such conditions, the monetary loss that happens in the process is too hard to deal with. It is where you need the advantage offered by the health insurance policies. If paying a few thousand rupees every year, save you from spending lakhs, then why not? So, let us help you know more about these health policies.

Common Health Insurance Terms and Definitions

We all know that not every person understands the terms used in the field of health insurance. Yet, at the end of the day, it is becoming very important for the customers to understand these terminologies in order to have at least the basic knowledge of the industry.

We all can agree that a little knowledge can always help us in the long run. So, the list given below contains some of the most common insurance-related terms which can always come handy.

  • Allowed amount: Also known as the allowable charge or the maximum allowable is the amount that is considered by the insurance company to be reasonable enough to be paid.
  • Benefit: It is the amount that the insurance company pays to the insured person.
  • Benefit level: It is the maximum amount that the insurance company has agreed to pay.
  • Benefit year: The 12 month period in which the insurance benefits are calculated. Although not necessarily coincides with the calendar year.
  • Claim: The request that is submitted to the insurance company to pay for the medical services.
  • Coinsurance: The amount that is to be paid after the covered services.
  • Co-payment: It is one of the ways to share medical costs. For example- a certain flat fee is paid from your pocket, while the insurance policy covers the rest.
  • Deductible: The amount of money that one needs to pay each year to cover the medical expenses they are eligible for.
  • Dependent: The individual who is insured by the primary member’s plan.
  • Drug Formulary: The list of the prescribed medicines that are covered by your insurance plan.
  • Effective Date: The data from which the policy holder’s coverage starts to begin.
  • Exclusion/Limitation: Any particular condition or treatment that is not covered by health insurance.
  • Explanation of Benefits: The terms and conditions of the health insurance company which explants how the medical claim could be paid off.
  • Health Savings Account (HSA): The personal savings account that allows the user to pay for their medical expenses.
  • Network: The group of doctors and hospitals with whom the insurance company has a contract and provides its services at a discounted rate.
  • Out-of-pocket Maximum: The most amount of money that one needs to pay during a year for the coverage. This particular amount generally includes deductibles, co-payments as well as coinsurances along with the regular premium. Apart from this amount, all the rest of the payment is insured by the insurance company itself.
  • Pe-existing Condition: The health issue which has been treated before buying health insurance.
  • Waiting Period: That amount of time required before becoming eligible for the coverage. At this time, the insurance company may not cover certain pre-existing conditions.

Different Types of Health Insurance Policies:

Searching for the perfect health insurance is just like hunting for the magic wand. There’s always one for everyone. Below are the lists of all the health insurance policies that are available to the general public:

  1. Individual Health Insurance: There are the most popular among all the other health insurance. Also known as the Standard Mediclaim policy is one of the simplest forms of health insurance that is available to the public. As the name goes by, this health insurance is designed to cover all the hospital expenses for the insured individual according to the policy’s assured sum.
  2. Family Floater Health Insurance: If you are looking for an all in one health insurance, then it is the right choice for you. The family floater health insurance is designed to insure the entire family under one roof. According to most companies terms and conditions, family floater cover self, spouse and up to two dependent children. The best thing about this particular insurance type is that the assured sum floats among the family members. It could be used by a single individual or split among the family.
  3. Critical Illness Health Insurance: It is also health insurance similar to that of Individual health insurance, while the only difference is that it covers only those critical illnesses that are specified in the policy. Sometimes these kinds of health insurance really come handy.
  4. Senior Citizen Health Insurance: As the name suggests, the senior citizen health insurance is only offered to individuals above the age of 60 years. Although the policy has a shorter waiting period, the premiums are comparatively higher than that of any other insurance policy. If you want to be independent even after your retirement, then this is just the right choice for you.

 Each of the insurance types comes with its own set of advantages and drawbacks. If you want to find the best policy that suits you, it would be wise to consider factors such as age, budget, the number of individuals that needs to be covered, etc. Don’t just take the word of anyone. In case you require consultation, always take the assistance of the specialized agents while buying your very own medical insurance.

Bonnie Baldwin