How to simplify and understand complicated health insurance terms and conditions

Insurance in general and health insurance in particular are complicated concepts that are often difficult to understand. Confusing terms, lengthy clauses and complex terminologies make it baffling for the common folk. As a result, people tend to avoid the trouble of going through elaborate pages of policy wordings and rely on their agents. This poses a major obstacle in future, when it comes to claims submission and settlement. Many health insurance claims get rejected or reduced as the health insurance policy excludes certain treatments or medical conditions, which the insured person might not have been aware of.

We have listed down some commonly used phrases to simplify health insurance terms and conditions, and help you understand them better:

1. Free Look Period: A period of 15 days from policy receipt date (this could be the date you received the policy on email too) during which you can assess whether or not it is best suited to you. If you feel otherwise, you can apply for cancellation of your health insurance plan. The insurance company is liable to refund the premium paid if the policy is free within the allotted 15-day time period (if you have not had any claim and after deducting charges, if any).
2. Grace Period: Health insurance has to be renewed annually to continue availing benefits. It is advisable to renew your policy before expiry date. However, you are allowed a “Grace Period” to renew your health insurance. Grace period is usually for an average of 30 days. However, there are some plans that allow 15 days only. Please note that there is no cover during the grace period.
3. Waiting Period: All health insurance plans define waiting periods for specified conditions and treatments. There is an Initial Waiting Period (usually 30 days) during which you cannot claim for any medical expenses other than accident-related treatment. Then, there is the Waiting Period for Pre-Existing Diseases and the Waiting Period for Specified Diseases. All health insurance plans mention a list of “Pre-Existing Diseases (PED)” or “Pre-Existing Conditions (PEC)” and “Specified Diseases” or “Specified Conditions”. These are health conditions and/or diseases that the insurance company does not cover until the defined Waiting Periods are served by the insured persons. Most insurers outline PED waiting periods for an average of three to four years, while others have longer waiting periods and few have shorter. 
4. Co-payment: Co-payment is a percentage of claimed medical expenses that the policyholders have to pay from their own pocket. The higher the co-payment percentage, the more the amount you will have to pay out-of-pocket. While this might help reduce premium amounts, it has a high financial impact, especially on larger claim amounts.
5. Deductible: Deductible is the specific amount of medical expenses incurred that the policyholder has to first pay, before claiming reimbursement from the insurer. The concept is similar to co-payment; however, the only difference is that deductible is a fixed amount whereas co-payment is usually a percentage of the claim amount.
6. Sub-limits: Specified amount or percentage of sum insured that would be paid by the insurance company for certain defined treatments or conditions. For example, an insurance company may specify in the health policy that they are liable to pay for Cataract operation up to Rs. 20,000 per year, subject to maximum two such operations in any given year.
7. No-Claim Bonus: If you do not raise any medical claims in a policy year, many insurance companies offer attractive rewards in the form of “No-Claim Bonus” or “Cumulative Bonus”. This is usually in the form of an increase in Sum Insured i.e. coverage amount.
8. Restoration or Reinstatement Benefit: In case you have a claim in a year, some insurers allow the Sum Insured to be restored or reinstated for a defined amount, percentage or number of times. If you have this benefit in the policy you can submit an additional claim within the same year, even after using up your cover.  Some plans provide this benefit even if you are hospitalized again for the same medical condition.
9. Domiciliary Hospitalization: Some patients are advised at-home treatment or “domiciliary hospitalization” by the doctor for conditions wherein the patient cannot be moved to a hospital, or if the hospital does not have beds available. Some health insurance plans factor in cost of treatment for domiciliary hospitalization up to a specified amount or percentage of Sum Insured.

SANA.Insure aims at making health insurance easy! You can access over 200 Frequently Asked Questions (FAQs) on SANA FAQs and health insurance articles to know more.

Do you have health insurance? Would you like to know for sure, whether the policy is the best one for you? Want to learn more about the terms and conditions in your health policy? Get it checked on SANACheck© today! Just enter some basic details of your health policy on SANAcheck. More than 40 features of your health insurance policy will be highlighted, so you will know what are the good, average, and below-average features. “SANACheck-ing” your health policy is a smart way to avoid claim-related surprises in future!

Wish you a healthy and happy life!