Understand These 10 Terms before You Buy Health Insurance


There is no second thought to the fact that health insurance has become the need of the hour. For first time buyers or people who do not know what is health insurance? it is an agreement that you sign with the insurance company of your choice, and they provide you with financial security during health emergencies, in exchange of premium amount. This was a simple explanation, but there are a few terms that you must know before buying the policy:

  1. Sum Insured

While making a claim, this is the maximum amount you are eligible to receive as compensation. The premium amount merely depends upon the coverage you’ve selected.

  1. Cumulative Bonus

The cumulative bonus entitlesyou to receive an increment in the sum insured for evert claim-free year up to a certain year.

  1. Cashless Claim

Under cashless claims, if you’re admitted in one of your insurer’s network hospitals, you don’t have to pay any cash from your pocket. The expenses are settled between your insurer and the hospital, without your interference.

  1. Deductible

You must first pay this amount to your insurer after filing a claim, after which your health insurance policy will pay the additional requirements. It comprises ofa percentage of the claim amount. Remember, higher the deductible amount, lower will be the premium.

  1. Premium Loading

Loading is the amount thatis added to your premium to bear any additional costs that could arise from providing coverage to an individual who exhibits a higher risk e.g. a person with a pre-existing disease.


  1. Family Floater Policy

A floater policy covers many individuals under a single plan. With this cover, you don’t have to worry about insuring every individual separately. This single cover can be used by any member of family.

  1. Critical Illness Policy

Your basic health insurance policy has limits and will not provide coverage for major illnesses. If you purchase a critical illness insurance policy, major life threatening diseases will be covered.

  1. Sublimit

A sublimit is the limit under an insurance policy that is provided on the coverage amount and is available for covering a particular type of expenditure or certain medical procedures.

  1. Overseas Mediclaim Policy (OMP)

This particular policy offers coverage to people who undertake trips out of India for either educational, business, or any other reason.

  1. Exclusions

Always make it a point to read the terms and conditions of your insurance policy before purchase. Your insurer might not cover certain things, and if you miss them out, you might face trouble while making a claim.

Once you’re well versed with these terms, you get a better understanding about health insurance. You can then choose a health plan accordingly. Purchasing a new health insurance policy or its renewal can easily be doneonline without facing any hassle.