Important Health Insurance terms one must know

Earlier, health insurance did not get the attention it was bound to. But in recent times, people are getting to understand the benefits of having health insurance at hand, considering the elevation in the incidence of health disorders in daily life.

Having the right health insurance cover for you and your family has become extremely important. But, in order to find a cover that fits your needs, it is imperative to have a clear understanding of the different health insurance terms that insurance companies use while describing their insurance products. 

To help you know the ABCs of health insurance, here’s a list of the most common insurance terms with their definitions.

• Claim: Claim is a formal request by a health insurance consumer to an insurance provider, asking for reimbursement of the medical expenses according to the terms and conditions of the insurance policy. So, when you undergo a medical procedure that is covered by your insurer, you need to file for a claim.
• Out-of-Pocket Costs: Having health insurance doesn’t mean that your insurer will reimburse you in the entire expenses in full. Out-of-Pocket Costs include a part of your medical expenses that aren’t paid for by your insurance provider. These costs can include copayments, coinsurance, deductibles for covered services, and the costs for the health care services that aren't covered by the policy.
• Out-of-Pocket Maximum: This is the maximum amount of money you will pay out of your pocket for covered services during the benefit period. This amount can vary from one plan to another and can include copayments, deductibles, and coinsurance. After you’ve paid enough to reach your out-of-pocket maximum, your health insurance provider will meet the rest of your medical expenses for that year.
• Copayment: Copayment means that you have to pay a fixed amount of the total medical bill. Copayment splits the health care costs between you and the insurer and varies from plan to plan.
• Coinsurance: Coinsurance is the percentage of health care costs of the covered services that you pay after your deductible has been paid. For example, the insurance provider may cover 80% of your hospitalization charges and you will have to pay the remaining 20%.
• Deductible: The amount you have to pay for the covered health care services before your insurer begins to pay. Usually, this amount is fixed for each year at the beginning of every year. 
• In-network provider: A hospital, pharmacy or medical practitioner who is a part of your health insurance provider’s preferred network of providers is an In-network provider. Opting for an In-network provider is beneficial; as they have an agreement with your insurance provider, and you will generally pay less for the services availed from them.
• Out-of-network provider: A hospital, pharmacy or a medical practitioner, who is not a part of your health insurance provider’s preferred network of providers is an Out-of-network provider. 
• Pre-existing condition: A health problem that was diagnosed before you bought a health insurance plan is a pre-existing condition. A pre-existing condition may not be included in your coverage.
• Rider: A rider is an addition to your health insurance coverage that enables you to expand your basic inclusions upon payment of an additional premium. An example of a health insurance rider is a maternity cover that remunerates the expenses incurred in childbirth.
• Waiting period: In a health insurance policy, there is a fixed period of time before your coverage can begin which is called the waiting period. And during this period a claim is not admitted. Different health conditions and coverage have different waiting periods.
• Annual limit: The coverage or benefits that your insurance company will provide in a year has a cap or limit to it, which varies as per the policy you opt for. Sometimes, these caps are put on particular services such as prescriptions or hospitalizations. After you reach the annual limit of your health policy, you will have to pay the health care costs for the remaining part of the year.

**To understand exactly about the policy coverage, exclusions, etc read the Policy Wordings carefully.**