If you are looking for a health or term life insurance plan in India, you will get many options. Before buying any policy, it is a usual practice to go through each document as it contains crucial information about policy coverage and criteria. As you go through it, you will come across terms that you might not have heard before however, grasping them is very important in order to understand the coverage being provided by the particular plan you are going to choose. Understanding basic insurance language allows us to better grasp the many benefits and features of a policy. Many insurance words such as “Maturity Benefit” or “Grace Period” can be found in brochures or sales literature. Frequently, such complicated terminology hinders people from purchasing term life insurance and health insurance plans, and even if they do, they may not understand the meaning of the numerous terminologies employed. With a thorough understanding of these, you can avoid costly blunders. Failure to do so may result in compromising your sum insured/sum assured during hospitalization or when the time arises for the death payout. If you’ve ever been puzzled about these terms, read on.

However, before you settle on the best health insurance plan for you and your family, you need to be aware of a few key phrases that we have mentioned above. No doubt, both life and health insurance plans offer numerous benefits, but in order to make an informed decision when purchasing a policy, you must first understand the specialized terminology used.

Insurance Terms to Know

• Policyholder: A person who purchases a term life insurance policy and pays the premiums. He or she may possess the policy but not be the life insured.
• Life Assured: The term “life assured” refers to the insured or covered individual. In the event of an unfortunate event, such as the death of the Life Assured, the nominee will be paid the insurance coverage amount. It is critical to grasp the distinction between a policyholder and a life assured. For example, when a husband purchases an insurance policy for his wife, he is the policyholder and his wife is the life-assured.
• Premium: This is the amount you pay to keep your term life insurance active. If you fail to pay the premium amount by the due date or during the grace period, your insurance may expire. The premium you pay is decided by the following factors:
  • The age of life assured.
  • The type of policy chosen.
  • Sum Assured
  • Policy Tenure
  • Lifestyle behaviours, such as smoking and drinking
• Sum Assured: The sum assured is the guaranteed amount that the nominee will receive in the event of the life assured’s unfortunate demise. The policyholder selects this amount while purchasing the coverage. It is paid to the nominee in the event of the life insured’s death during the policy term.
• Policy Tenure: The duration for which a term life insurance policy provides insurance coverage or the time period for which the policy was purchased.
• Nominee: The Nominee is the individual nominated by the policyholder to receive the death benefit incase of the unfortunate demise of the insured. The nominee is sometimes referred to as the beneficiary. If the nominee was not disclosed at the time of purchase, he or she might be added to the policy at any time throughout the policy term before it matures.

Health Insurance Terms to Know

1. 1. Add-on Covers/Riders/Optional Covers: Add-on covers in health insurance are extra features. This is an additional element in health insurance that provides financial protection against unanticipated medical emergencies that are usually associated with high medical costs.

Some of the add-on/optional covers available to supplement your main health insurance plan are critical illness coverage, maternity coverage, room rent waiver, hospital cash benefit, and more.

1. 2. Automatic Restoration: Most health insurance now include a restoration benefit’. You receive a ‘financial backup’ to reclaim your covered amount. If the whole sum insured is exhausted, it is immediately reloaded for the following hospitalization during the insurance period.
   3. Co-morbidities/Pre-existing conditions: Health comorbidities such as COPD, hypertension, diabetes, kidney problems, cardiovascular troubles, and other underlying conditions are considered major risk factors for health insurance. Patients with pre-existing medical issues, as indicated above, are deemed to be at a higher risk and hence pay a higher premium.
   4. Co-payment: Some health insurance plans include a copayment or copay clause. It is a fixed percentage of the cost that the insured/policyholder must pay to the insurance company prior to obtaining healthcare services. It is stated in the policy wordings that those over the age of 60 must pay a 20% co-pay at the time of claim for each medical treatment received.
   5. Critical illness: Sometimes known as life-threatening medical conditions, includes cancer, kidney failure, and cardiovascular disease. There are certain medical insurance plans that cover these conditions. Alternatively, you can purchase a rider or add-on cover.
   6. Sum Insured: The policy coverage amount is known as the sum insured. The insurer compensates an amount equivalent to the total covered, which might range from Rs 5 lakh to Rs 100 crore.
   7. Waiting Period: In a medical insurance policy, there is a set time period during which you cannot use the coverage benefits. During the waiting time, health insurance claims are not accepted. The waiting periods for various health conditions and coverages range.
   8. Network Hospitals: Every health insurance provider in our country has a partnership with a set number of hospitals known as network hospitals. These are the hospitals where you can receive treatment without having to pay the bill; the insurer pays the cost immediately up to the coverage limit and it is known as the cashless claim service.

So we are saying,

These are some of the healthcare and term life insurance keywords that can help you find the best health insurance policy. We believe you will agree that having some knowledge ahead of time would help everything make more sense. This will allow you to make informed decisions for yourself and your family, particularly about medical insurance.

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