Must-know health insurance terms before you buy: A SIMPLE GUIDE
A deductible is the amount you pay out of pocket before your insurer starts covering expenses. For example, if your deductible is ₹2,000 and your claim is ₹15,000, you’ll pay ₹2,000 and the insurer will pay ₹13,000.
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The saying, “Health is Wealth,” has never been more relevant than in recent years. Today, having a health insurance policy is no longer just an option — it’s a necessity to protect yourself and your loved ones against unexpected medical expenses. But before you choose a health insurance plan, it’s important to understand some key terms that will help you make the right choice.
FREE LOOK PERIOD
What if, after buying your policy, you find that it doesn’t meet your needs? Don’t worry — the free look period lets you cancel your policy within 15 or 30 days of receiving the documents and get a refund of your premium. It’s wise to carefully review your policy during this time to ensure it covers what you expect.
GRACE PERIOD
Missed renewing your policy on time? Most insurers offer a grace period of 15 days during which you can renew without losing benefits, provided there were no claims during the break. This extra time can save you from having to buy a new policy altogether.
DEDUCTIBLE
A deductible is the amount you pay out of pocket before your insurer starts covering expenses. For example, if your deductible is ₹2,000 and your claim is ₹15,000, you’ll pay ₹2,000 and the insurer will pay ₹13,000. Generally, a higher deductible means a lower premium — but it also means more upfront cost during a claim.
CO-PAY CLAUSE
Co-pay means you agree to pay a fixed percentage of each claim. If your policy has a 10% co-pay, you pay 10% of medical bills and your insurer covers the rest. For instance, on a ₹30,000 bill, you’d pay ₹3,000 and the insurer ₹27,000. Unlike deductible, co-pay applies to every claim, not just the first amount.
CUMULUTUVE BONUS (CB)
This is a reward for staying claim-free. For every claim-free year, your insurer may increase your sum insured by a certain percentage—say 5%—without extra cost. For example, a ₹20 lakh cover may increase to ₹21 lakh after one claim-free year, and so on. If you do make a claim, this bonus decreases accordingly. CB helps you keep pace with medical inflation without having to buy a new plan each year.
Understanding these terms will empower you to make an informed and confident choice when buying your health insurance policy. Stay protected, stay prepared!