Health Insurance Terms You Should Know — Part 1.

Take the confusion away from health insurance by browsing this simple guide on most common health insurance terms

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Healthcare costs today are rising uncontrollably — quite like the mercury of a thermometer when you are sick! Thankfully, with a quality health insurance policy by your side, you do not have to worry about medical expenses.

Health insurance, however, can seem like an alien concept to first-time buyers. There is a sea of terms you need to understand before you buy a plan. But fret not! Here’s your quick guide on to health insurance terms. This will help you make confident and informed health insurance choices. Let’s begin!

Sum insured

This is the maximum amount your insurance company will pay in case you are hospitalised. If your sum insured is Rs 5 lakh, the insurance company will cover your bills up to Rs 5 lakh. Anything more than that and you will have to cover it out of your own pocket.


This is one of the most commonly used terminologies in health insurance — or any kind of insurance for that matter. It is simply the annual cost of the insurance policy you are buying. Different health insurance plans have different premiums depending on the number of covers and amount of protection (sum insured) they provide.


While under the protection of a health insurance policy, you are entitled to request your insurance provider to cover medical expenses you incure. This request for compensation is known as a claim.


When you make a claim, you are required to pay a small part of your medical expenses before the insurance company covers the rest of the costs. The part you pay is known as a deductible. A deductible is also known as ‘excess’ and is two kinds — compulsory and voluntary.

Compulsory deductible, as the name suggests, is mandatory, and set by the insurance provider when you purchase the policy. Voluntary deductible is when you can choose to pay an additional amount above the mandatory deductible — it helps you lower the premium of your health insurance plan. The more you pay, the lower your premium gets!


If you do not make a claim during the tenure of your policy, you are entitled to receive a reward when you renew your plan. This reward is known as NCB, or no claim bonus. This bonus could be a discounted premium (with no change in the protection of the plan) or added protection (with no change in the premium of the plan).


Porting refers to the process of changing insurance providers. When you port from one insurance company to another, it means you cancel your existing policy and get another policy from a new insurance provider. You could port your policy if you are not satisfied with the existing health policy or if you do not like the services of the health provider or if you are getting a similar cover at a lower price elsewhere.

These are six of the more important health insurance terms you should know about! If you found them helpful, you should stay tuned for our next article — it will go over some more vital health insurance lingo every first-time health insurance buyer should be aware of.

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