Common Health Insurance Terms Explained: A Glossary for Consumers

When considering health insurance, understanding industry terms can be challenging, yet it's essential for choosing the right plan.

Familiarity with terms like "copays," "coinsurance," and "deductibles" helps you to make informed choices, ensuring you select the plan that best fits your needs.

Here, we break down these terms to simplify your journey through health insurance plans and, if needed, maternity insurance plans. 

Co-pay

A co-pay, or copayment, is a fixed amount you pay out-of-pocket for certain medical services. For instance, if your health insurance policy has a co-pay of 10% for doctor visits, you would pay 10% of the bill while your insurer covers the rest. Co-pays encourage mindful use of healthcare services and ensure everyone shares a small part of the cost. This structure varies from one policy to another, with some policies applying co-pays only to specific treatments or medications.

Deductibles 

A deductible is the amount you need to pay before your health insurance plan begins covering medical expenses. Suppose your plan has an annual deductible of INR 6,000, meaning you pay the first INR 6,000 before the insurance starts, for any healthcare costs incurred. Deductibles help keep insurance premiums manageable while promoting shared financial responsibility between the insurer and the policyholder. In the case of maternity insurance plans, deductibles may apply only to specific services, so reviewing this detail in your policy can help in planning your finances for future medical needs.

Premiums

The premium is the amount you pay regularly (monthly, quarterly, or annually) to keep your insurance active. They vary widely depending on the level of coverage, the insurer, and factors like age, health status, and lifestyle. While premiums don’t directly contribute to healthcare costs at the time of service, paying them ensures you remain covered in case of any medical need. Choosing the right balance between premiums and coverage can help you find an affordable plan without compromising essential benefits.

Preferred Provider Network (PPN)

A PPN plan offers greater flexibility, allowing you to choose between in-network and out-of-network providers without needing a referral for specialists. While PPNs typically come with higher premiums, they provide more freedom in selecting healthcare providers. Understanding both the in-network and out-of-network rates in your PPN plan is essential for making cost-effective healthcare decisions.

Sum Insured

The sum insured is the maximum amount your health insurance plan will pay for covered expenses in a policy year. For example, if your sum insured is INR 5 lahks and you’ve claimed INR 2 lakh, you still have INR 3 lahks available for future medical costs within that policy year. Choosing a sufficient sum insured is essential for protecting yourself against major medical expenses without depleting your coverage mid-year.

Waiting Period

The waiting period is a specified time during which certain claims may not be covered by your policy. For instance, there may be a waiting period for pre-existing conditions or specific treatments under maternity insurance plans. Typically, insurers impose a 30-day waiting period after the policy’s start date, except for accidents. Understanding this clause will ensure you’re not caught off guard if certain treatments are not immediately covered.

Network Hospitals

Network hospitals are healthcare providers partnered with your insurer to offer cashless treatment options. Cashless claims mean you won’t have to pay upfront; the hospital will coordinate directly with the insurer. Insurers like Bajaj Allianz General Insurance Company are known for this extensive feature. Opting for treatment at network hospitals simplifies the claims process and can reduce out-of-pocket expenses, but verifying the network list in advance is essential.

Pre and Post-Hospitalisation Expenses

Pre and post-hospitalisation expenses cover costs incurred before and after a hospital stay, such as consultations, medications, or follow-up visits. Many insurance plans include this benefit, which helps cover all related expenses beyond just the primary treatment. Reviewing the duration and extent of this coverage can add peace of mind, knowing that your insurance protects you from additional costs tied to recovery.

Additional Coverage Options

Many insurance plans offer optional benefits. For example, air ambulance may be covered as an add-on, compensating for emergency transportation costs. Such options allow you to customise coverage based on individual needs, adding layers of protection to your policy.

Exploring health insurance terminology can seem overwhelming, but understanding these common terms is essential for selecting the right coverage. Knowing these terms helps you compare policies and make informed decisions. By decoding these terms, you’ll be well-equipped to choose a plan that truly serves your healthcare needs.

*Standard T&C Apply

**Claims are subject to terms and conditions set forth under the health insurance policy.

***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.

****Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.