Definition of Health Insurance Terms
A health insurance insures an individual against several illnesses and provides financial security. The company provides health insurance depending on the medical details of the individual. An individual has to read the fine prints in the insurance document to help him/her to choose the best suitable plan and to avail the best benefit.
Few terminologies that aid in understanding are:
Adult day care: Out-of-home care for disabled adults providing for physical and social needs. This is usually for people who are physically handicapped – temporarily or permanently, or for aged people.
Aftercare: Services provided after hospitalization and rehabilitation. Not all insurances cover this facility, therefore, if you want this to be a part of the insurance you buy, look for it in the fine print.
Basic hospital expense insurance: Covers room, board and some miscellaneous expenses for a certain number of days. Billed claims is the amount a hospital or a doctor’s bill comes up to for medical care. This might also include the surgeon’s cost and medicines bought.
Blanket medical expense policy: A plan that pays all medical expenses on a claim without
limiting any services or procedures up to a certain ceiling amount.
Carry-over provision: Clause in medical policy that allows a person who has submitted no medical expenses in a year to apply, or carry over, expenses occurring in the last three months of the year toward the next year’s deductible.
Co-pay: The portion of a bill that the insured pays, usually at the time of service. Often expressed as a set fee for a specific service.
Disability income insurance: Health insurance that provides some payment to replace lost income if the insured becomes sick or disabled.
Entire contract clause: An addendum stipulating that everything in the insurer/insured relationship is spelled out in the contract.
Extended coverage: An addendum specifying that if the insured has an ongoing condition, like a pregnancy, that began when the policy was in force, expenses associated with the condition will be covered even after the policy has expired.
Group insurance: Insurance coverage usually issued to an employer under a master policy for the benefit of employees.
Lapse: The termination or discontinuance of a policy, usually resulting from the insured’s failure to pay the premium due.
Portability: The ability to switch insurers seamlessly without pre-existing condition exclusions. You need to ask for more details if you would like to have this option open.
Pre-existing condition: A health-related situation that pre-dates the person’s coverage under the policy or plan.
Premium: The payment, or one of the periodic payments, for insurance coverage.
Tax benefits: In India, exemption on health insurance up to a premium of INR 15,000 under section 80 D can be availed.
These terms become extremely important as it is important for one to understand what the health insurance covers and what it does not cover. Without understanding what the insurance covers, one will not be able to get complete benefits, and therefore, the entire purpose of having an insurance will be a waste.
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