With the incessant surge in medical costs, having health insurance can be your green ticket to a healthy future. Not only does it offer financial security amid a health catastrophe but also provides lifetime protection. Isn’t that amazing? Now, before you take a deep-dive into buying health insurance, here are 4 terms you must know as a policy buyer.
Premium: This is the cost a policy buyer has to pay to the insurance company in return for financial support at the time of health emergencies. The policy buyer has to pay the premium for the number of years they have opted for. If the health insurance is taken for five years, you have to pay the premium annually for the chosen plan period. The annual premium value payable is established by the insurance company.
Co-Payment: Some insurance policies have this clause where the policy buyer should bear a slice of the total claim amount. This money goes from your wallet as incidentals. Case-in-point, if the policy buyer claims an insurance amount of Rs 20,000, having the co-payment clause in place will propel him/her to splurge a percent from their funds.
Deductible: This is an expense a policyholder has to pay from their wallet prior to going for an insurance claim. The deductible value is predetermined by the insurance company amid buying the policy. For instance, your health insurance claim amount is Rs 25,000 and your deductible is Rs 5,000. Your insurer will pay only Rs 20,000 after you cover your deductible.
Cumulative Bonus: If the policyholder doesn’t claim anything during the policy year, they’ll be monetarily rewarded for the same. This is not a discount but an added benefit the policyholder gets at a later stage of the policy.
Now that you are more familiar with the basic terminology it may just be easier for you to delve into the nitty-gritties of buying a health policy.