Medical Insurance Essential Guide :Deductible, Co-Pay, PED, Non-Disclosures and Exclusions

Medical Insurance policy Jargons explained: your Essential Guide to Deductible, Co-Pay, PED, Non-Disclosures and Exclusions

Now Health Insurance is a financial security tool now, gone are the days pre-COVID- 19, when Insurance company had to struggle hard to sell Health Insurance policy, people were reluctant to buy, use to say, “will see” ...

In Covid-19 and after that people realized the importance of Health Insurance and it gained momentum. Understanding medical insurance terminology and policy wording is import if you want to avoid claim rejection. Many of the policy holder buy Insurance Policy without knowing the Health Insurance jargons like Co-Pay, Deductible, Non-Disclosures, PED and from where the common claim disputes start.

An Informative and short description has been explained in simple words.

What is Deductible in Health Insurance?

In simple it is a cost sharing arrangement between you and your insurance company. Insurance company will pay your claim only after the claim amount reached to beyond the Deductible amount and payable amount by insurance company will be Total Claim Amount-Deductible amount, subject to policy term and conditions.

Example- Hospital’s bill is of Rs15Lacs, deductible amount in Insurance policy is Rs 10 Lacs, so in this scenarios Insurance company will pay you only Rs 5 Lacs, final amount will be paid subject to policy terms and conditions.

Why Deductible Exists?

• It lowers the Premium

• Encourages policy holder to take Higher Sum Insured Policy

• Reduces Moral Hazard

• Use of Medical services responsibly

• Insurance company saves on claims

Why Co-Pay in Medical Insurance?

It means a percentage of total bill will be paid by policy holders, rest by Insurance company subject to policy terms and conditions.

Example-if co-pay is 20 % and hospital bill is Rs 2,00,000.

• You pay Rs40,000

• Insurance company will pay Rs1,60,000.

Where it gets applied more commonly:

• In group Policies

• Senior Citizens Policies

• Pre -Existing Disease Policies

• High Risk PolicesWhy Co-Pay in Medical Insurance?

What is PED (Pre-Existing Disease)?

PED means a medical condition (diagnosed or undiagnosed) exists before buying a policy, you should always disclose this while taking a policy, it has a direct impact on Claim, Policy Premium and Policy terms and conditions.

Example: -Diabetes, Heart Disease, Hypertensions, Asthma, Thyroid or any other medical conditions which has an impact on Risk assessment.

Why PED maters?

• Claims related to PED will be rejected

• PED has a waiting period, after the completion of waiting period claim can be paid

What is Non-Disclosure?

It means not giving your health-related information to Insurance company while buying the policy, it has a direct impact on Claim.

Example:

• Hiding Smoking and Alcohol habits

• Hiding medical history

• Hiding about family history

• You have Sugar/BP but not revealing while taking the policy to Insurance company

• Not disclosing your health deformities

Consequences:

• This may lead to policy cancelation

• Marking Fraud in Insurance companies’ records

• One on the biggest reason of Claim Rejection

What is Exclusions in Medical Insurance?

It is a common diseases/conditions or treatments for which insurance company never pay.

Common Medical Insurance Exclusions in India:

• Cosmetic Surgery

• Congenital diseases

• Dental Treatment

• Weight Reduction surgery

• Infertility Treatment

Always check the policy wording once you receive the policy bond and incase on any doubt/concern connect to your Insurance Advisor /Company.

Key Takeaways:

Medical or Health Insurance are not complicated but only the so-called jargons. Once you understand these Terms, you can make smarter decision by buying right policy with right information’s and avoid any claim rejection or policy cancellations.

These views expressed here is personal, payable claims are subject to policy terms and conditions as per Insurer’s companies’ policies.