Table of Content:
Introduction to Health Insurance Clauses
Understanding Deductibles
Decoding Co-Pay
Restore Benefit (Automatic Restoration)
Pre and Post Hospitalisation Expenses
Waiting Periods
Room Charges Restrictions
Attendant allowance
Cashless Claim
Coverage Amount/Sum Assured/Sum Insured
Critical Illness Policy
Cumulative Bonus
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No Claim Bonus
Disability Insurance
Disclaimer
Health insurance has become an essential part of our lives, offering financial protection against unforeseen medical expenses. However, understanding the clauses in your health insurance policy can be a confusing task. In this article, we aim to simplify and explain the most important clauses you must be aware of before buying health insurance. This will help you make an informed decision and ensure you get the most out of your health insurance policy.
Introduction to Health Insurance Clauses
Health insurance policy terms and clauses are crucial in understanding what is covered, what isn't, and how much you'll have to pay out of pocket for different types of care.
Understanding Deductibles
A deductible is the amount you pay for healthcare services before your health insurance begins to pay. Deductibles are typically defined annually, meaning they reset every year. If your policy has a deductible, you must pay that amount before your health insurance company starts covering your medical bills.
Decoding Co-Pay
Co-pay is a fixed amount that you pay for each visit or service. The remaining balance is covered by your insurance plan. For example, if your co-pay for a doctor's visit is $25, you'll pay that amount each time you see the doctor and your insurance will cover the rest.
Restore Benefit (Automatic Restoration)
Restore benefits are a feature of some health insurance policies that automatically restore the sum insured to the original amount if you exhaust it in a policy year. This is applicable for claims made for different illnesses or diseases, providing an additional safety net.
Pre and Post Hospitalisation Expenses
Pre-hospitalisation expenses are the costs that you incur before getting hospitalized for a treatment, such as costs towards diagnostic tests, medicines, etc. Post-hospitalisation expenses include charges incurred after a patient is discharged from the hospital, such as follow-up visits, medication, etc. Most health insurance policies cover these expenses for a specific number of days pre and post hospitalisation.
Waiting Periods
The waiting period in a health insurance policy refers to the specific amount of time that must pass before some or all of your health care coverage can begin. The purpose of a waiting period is to prevent fraud by ensuring that people don't apply for health insurance only after they become sick or injured.
Room Charges Restrictions
Most health insurance policies have a clause for room rent limit. It is the maximum amount that is payable by the insurance company for the room rent of the hospital where the insured is admitted. If the actual room rent is more than the limit specified in the policy, the policyholder has to bear the additional cost.
Attendant allowance
Attendant allowance is a benefit provided by some health insurance policies that offers a daily cash allowance to the policyholder if he/she is hospitalized. This allowance is meant to cover non-medical expenses such as transportation, food, etc.
Cashless Claim
In a cashless claim, the health insurance company settles the bill directly with the hospital so that the policyholder does not have to pay anything at all. This facility is typically available only at network hospitals listed by the insurer.
Coverage Amount/Sum Assured/Sum Insured
The sum assured, also known as coverage amount or sum insured, is the maximum amount that the insurance company will pay you when you file a claim. The sum assured is chosen by the policyholder at the time of purchasing the policy.
Critical Illness Policy
A critical illness policy is a type of health insurance that offers a lump-sum benefit if the policyholder is diagnosed with a serious illness listed in the policy document. This payout can be used to pay for treatment costs, to pay off debts, or any other financial needs.
Cumulative Bonus
A cumulative bonus is an increase in the sum insured for every claim-free year. It is a reward that the health insurance company gives to the policyholder for not making any claims in the previous years.
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Loading refers to the increase in premium on renewal after a claim has been made in the previous year. This is done to cover the higher risk associated with the policyholder.
No Claim Bonus
No claim bonus is a discount that the policyholder receives on the premium if no claim has been filed in the previous year. It is a reward given by insurance companies for maintaining a claim-free record.
Disability Insurance
Disability insurance is a type of insurance that provides income in the event a worker is unable to perform their work and earn money due to a disability. It can help cover day-to-day expenses, medical bills, and more.
Knowing these terms can help you understand your health insurance policy better and make the most of it. Remember, a good health insurance policy is one that offers comprehensive coverage and suits your specific needs and budget. Be sure to read your policy document carefully and ask your insurer any questions you may have. With Asset Plus, you can learn more about health insurance and other financial topics. We provide training and empower individuals to become independent MFDS. Our platform offers a wealth of resources to help you understand and navigate the world of finance. So, equip yourself with the right knowledge and secure your health with the best insurance policy. Remember, health is wealth. Protect it wisely!
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