Common Health Insurance Terms You Should Know img

Common Health Insurance Terms You Should Know

The health insurance industry has its own language. Terms that professionals use every day may be unknown to people looking for a health insurance policy for themselves, their family, or employees.

If you need health insurance, you owe it to yourself to learn a few common health insurance terms. Below we look at some terms and concepts that can help you get the right health insurance policy for home or work.


The person who gets the benefits of the policy.


The payment request filed by the insured person to the Insurance company for payment of Medical Expenses.


Co-payment is a cost-sharing requirement under a health insurance policy. In certain cases, the policyholder agrees to bear a certain percentage of the hospital bill. As per the conditions of the policy, it is called a co-payment. In doing so, the insurer charges a lesser premium. It’s important to note that the sum insured in such cases remains the same and does not go down. This feature is more likely in a senior citizen health insurance plan.

Cumulative Bonus

Cumulative bonus is similar to NCB (No Claim Bonus). For every claim-free year, the sum insured increases by a fixed percentage as per policy but cannot exceed 50 percent of the Main Sum Insured and is admissible only if the insured continually renews the policy.


More the deductible amount, the lesser the premium. A deductible is a cost-sharing requirement under a health insurance policy, which can be a fixed amount or a percentage of the claim amount. Under this provision, the insurance company will not be liable to pay for that fixed or percentage amount of the covered expenses. It is the liability of the policyholder to pay the contracted deductible amount to the hospital.


Spouse or unmarried children (whether natural, adopted or step) of an insured.


Conditions or circumstances for which there will be no benefit in the policy.

Grace Period

The specified period of 15 days immediately after the expiry of the premium payment due date. During this period, you can pay to renew or continue a policy without loss of continuity benefits such as waiting periods and coverage of Pre-existing diseases. However, coverage will not be available for the delayed period from the due date. Therefore, it’s very important to keep renewing the health insurance as and when the premium is due. The waiting periods in health insurance policy range from 12-48 months, depending on ailments. The continuity benefits are lost when the policy is not renewed even within the grace period.


The insurance company.

Long-Term Care Policy

Insurance policies that provide specified services for a specified period. Such services usually include nursing care, home health care services, and custodial care.

Long-term Disability Insurance

Under this, the company pays the insured a percentage of his monthly income if he is incapacitated/disabled.


A fixed periodical amount an insured is required to pay to avail of the insurance coverage benefit.


It is a legal contract between the insurer and the insured. It contains the conditions of the insurance.


Pre-existing condition is any condition, ailment, injury, or related condition(s) for which the insured had symptoms or was diagnosed or received medical advice/treatment within 48 months before the first policy issued by the insurer. Although the policy covers pre-existing ailments after a certain period, it is advisable to disclose any such ailment and ongoing medication to the insurer. Non-disclosure may result in the rejection of the claim by the insurer. Many health plans have started covering even pre-existing ailments, provided the policy is continuously renewed with the same insurer and without any claims for four years.


A group of doctors, hospitals and other health care providers who are part of the contract under the policy and obligated to provide services to insured persons at lower charges than their normal fees.

Sum Insured

The sum insured is the pay-out amount that the Insurance Company is liable to pay to the insured in case of an eventuality. It works on the principle of indemnity.

Waiting period

When you take out a new health insurance policy, certain policy benefits will not be available. It is usually a fixed period from the date of commencement of the policy, after the completion of which certain specific benefits of the policy take effect. For example, the usual waiting period for pre-existing conditions is four years.


Some providers have health insurance policies depending on your requirements. However, before you apply, please read the policy wording carefully.

Contact Insurance Enterprise for Premier Health Insurance

If you have questions about health insurance and need health insurance quotes, contact Insurance Enterprise at 888-350-6605. Speak to a licensed agent and find out more about how you can get an affordable health insurance plan.