What key insurance terms should I understand before buying a policy?

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Life is full of surprises, filled with unexpected twists and turns. One must be prepared for the worst, as life is unpredictable.


Health emergencies can come anytime, even without a warning. However, it is quite easy to tackle them if you have a health insurance plan.


However, before purchasing a health insurance policy, it is important to understand certain key terms. Such terms include:



  1. Cashless Hospitalisation Facility:The insured can receive treatment at a network hospital without paying any cash from their own pocket.

  2. Sum Insured:This is the maximum amount that the insurer will pay for your medical expenses in a policy year. Opting for an adequate sum insured is important to cover rising healthcare costs.

  3. Premium: The premium is the amount you pay to the insurance company to keep your policy active. The premium can be paid monthly, quarterly, or annually according to your convenience.

  4. Co-payment (Co-pay): Co-payment is a fixed percentage of the health insurance claim amount that you need to pay at the time of claim settlement. However, the remaining amount is paid by the insurance company.

  5. Waiting Period:This is the time period during which you must wait before certain benefits of the policy become active. Pre-existing diseases, maternity benefits, etc., usually have a waiting period under all health insurance plans.

  6. Pre-existing Ailments:It is a condition that you had before purchasing the policy. The coverage for such conditions begins only after you serve the waiting period.

  7. Network Hospitals:These are referred to as the hospitals that have a tie-up with the insurance company. At these hospitals, the policyholder can receive cashless treatment, and the cost of medical treatment is handled directly by the insurer.

  8. Exclusions/limitations: Exclusions in health insurance refer to diseases, medical conditions, treatments and specific circumstances that are permanently not covered or covered after a specific waiting period.