Health Insurance Glossary: Sum Insured, Co-pay, NCB, Waiting Period, Indemnity & More
Quick answer: Essential health insurance terms: Sum Insured is the maximum claim payout limit per year; Co-pay is a fixed percentage of each claim borne by the insured; NCB (No Claim Bonus) increases sum insured for claim-free years; Waiting Period is the required duration before specific coverage kicks in; and Indemnity Insurance reimburses actual hospital expenses incurred.
Key facts
- Sum Insured: Total financial pool available for claims in a policy year.
- Co-payment: Mandatory percentage sharing of hospital bills (e.g. 10% co-pay on senior citizen claims).
- PED (Pre-Existing Disease): Any health condition diagnosed before buying the policy.
- Restoration Benefit: Automatically re-instates sum insured if exhausted during a policy year.
Core Health Insurance Terms Explained
- Sum Insured: The maximum liability the insurer will pay for all claims during a policy year.
- Indemnity Insurance: A policy that reimburses the actual financial loss/hospital bill incurred, up to the sum insured.
- Co-pay (Co-payment): A clause requiring the policyholder to pay a fixed percentage of every claim (e.g., 10% or 20%).
- Deductible: A fixed initial amount the insured must pay out-of-pocket before the insurer starts paying benefits.
- NCB (No Claim Bonus): A cumulative bonus that increases your sum insured (usually 10%-50%) for every year without a claim.
- PED Waiting Period: The time (typically 12 to 48 months in retail plans) an insured must wait before pre-existing diseases are covered.
- Restoration / Refill Benefit: A feature that reinstates 100% of your sum insured if it gets exhausted by previous claims in the same year.
- Free-Look Period: A statutory 15-to-30 day window after policy receipt during which you can cancel for a full refund if dissatisfied with terms.
Frequently asked questions
What is NCB full form in insurance?
NCB stands for No Claim Bonus, a reward given by insurers for claim-free years by raising sum insured or reducing renewal premium.
Can I port my health insurance policy to another company?
Yes, IRDAI allows policyholders to port health insurance to another insurer without losing accumulated waiting period credits or No Claim Bonus.
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