15 Terms You Must Know Before Buying Health Insurance

Cashless Claim As the term suggests, the insured can make a claim without paying any cash for the medical assistance at the specified network hospitals.

Coverage Amount/Sum Assured/Sum Insured It is the maximum amount payable in the event of a claim. The premium of the health insurance policy is dependent on the coverage amount chosen by you. To know more about this topic, check our resource on Sum Insured

Critical Illness Policy A policy for a serious, possibly terminal disease, which is strictly defined by the insurer. Most critical illness policies provide for the payment of a lump sum benefit if the policyholder is diagnosed as suffering from any one of the specified conditions.

Cumulative Bonus Cumulative bonus is similar to no claim discounts, the only difference being that instead of giving an upfront discount, the health insurance company adds more benefits for the same premium paid.

Disability Insurance It is a form of insurance that pays a monthly income to the insured when he suffers from total or partial disability caused due to either illness or injury, that affects his capacity to work and earn

Deductible Deductible is the amount of loss borne by the insured after which the insurance kicks in. This share of expense can be a certain money amount or a percentage of the claim amount. However, bigger the deductible, lower is the premium.

Exclusions The diseases, conditions or situations in which medical expenses are not covered by the health insurance policy. Exclusions can be of two types – ‘Permanent’, i.e. the ones never covered and ‘First year’, which are ailments covered from second year.

Floater Policy A Family Floater Health Insurance also called the family health insurance is a type of health insurance policy that is issued with a single sum insured covering number of individuals. The cover can be used by any member of the family any number of times.

Sublimit It is the limitation in an insurance policy on the amount of coverage available to cover a specific type of expenditure. It can be in amount or percentage.

Loading It is the amount a health insurance company adds to you renewal premium if you had made any claims in the previous year.

No Claim Bonus It is a bonus or rather a discount on the Basic Premium if there is a claim-free year in the policy. This bonus gets accumulated with each year you don’t make a claim.

Overseas Mediclaim Policy (OMP) An Overseas Mediclaim Policy is issued to persons who are undertaking trips abroad for business, pleasure or educational purposes.

Personal Accident Policy They are issued as fixed benefit policies whereby specified sums are paid on the occurrence of specified events such as death or disability.