📚 Policy Education

Know Your Policy

Insurance documents are full of terms that sound simple but can cost you lakhs at claim time. Here's what every policyholder must know — in plain English.

These terms directly affect how much money you get at claim time. Not knowing these is the most common reason people lose lakhs even when they have insurance. Read these before your next renewal.

The Big Three — Room Rent, Co-pay, Waiting Period
Room Rent Limit
Most Dangerous

Your policy says you can only spend ₹X per day on a hospital room. If you take a more expensive room, the insurer cuts EVERYTHING proportionately — not just the room bill.

Example: Room rent limit ₹3,000/day. You take a ₹6,000/day room (2× limit).
ExpenseActual BillInsurer PaysYou Pay
Room (5 days)₹30,000₹15,000₹15,000
Surgeon fees₹80,000₹40,000₹40,000
ICU charges₹50,000₹25,000₹25,000
Medicines₹20,000₹10,000₹10,000
Total₹1,80,000₹90,000₹90,000
You took a room that cost ₹3,000 extra per day — and ended up paying ₹90,000 out of pocket.
Watch out: "1% of sum insured per day" on a ₹5L policy = ₹5,000 limit. Sounds fine until you're in a Delhi or Mumbai hospital charging ₹12,000/day.
Co-payment (Co-pay)
Must Check

A percentage of every claim you must pay from your own pocket, no matter what. The insurer pays the rest.

Example: 20% co-pay. Hospital bill ₹2,00,000.
ScenarioTotal BillInsurer PaysYou Pay
0% co-pay (good policy)₹2,00,000₹2,00,000₹0
20% co-pay (watch out)₹2,00,000₹1,60,000₹40,000
30% co-pay (senior policy)₹2,00,000₹1,40,000₹60,000
Watch out: Senior citizen policies often have 20-30% co-pay buried in the fine print. Always check this for policies renewed after age 60.
Waiting Period
Must Check

A period during which certain conditions or treatments are NOT covered, even though you are paying premium. There are two types — initial waiting period (usually 30 days) and pre-existing disease waiting period (1-4 years).

Example: You buy a policy in January. You are diagnosed with diabetes in March. If your PED waiting period is 2 years, your diabetes treatment is not covered until January of the third year.
Watch out: Even conditions you didn't know about at policy inception can be treated as pre-existing if they show up within the waiting period.
Pre-existing Disease (PED)
Must Check

Any illness, condition, or injury you had before buying the policy. Insurers typically exclude these for 2-4 years from policy start date.

Example: You have high blood pressure before buying a policy. Any hospitalisation related to hypertension, stroke, or heart issues may be rejected for the first 2-4 years.
Watch out: Always declare ALL conditions honestly when buying. Non-disclosure gives the insurer grounds to reject claims or cancel your policy entirely.
Claims — What Actually Happens
Cashless vs Reimbursement
Important

Cashless means the hospital bills the insurer directly — you pay nothing upfront. Reimbursement means you pay the hospital first, then submit bills to the insurer and wait for the money back.

Example: Cashless at a network hospital means zero stress during hospitalisation. Reimbursement can take 15-30 days and may involve disputes over each bill.
Watch out: Cashless is only available at network hospitals. Check if your regular hospital is in your insurer's network before an emergency.
Sum Insured
Important

The maximum amount your insurer will pay in a policy year. Once exhausted, you pay 100% of further medical bills yourself — until the next policy year begins.

Example: Sum insured is ₹5 lakh. You have a surgery costing ₹4.5 lakh in July. If you're hospitalised again in November, only ₹50,000 is left from your cover.
Watch out: ₹5 lakh sounds like a lot until you see a single ICU bill from a private hospital in Mumbai or Delhi.
Exclusions
Must Read

Conditions, treatments, or situations your policy will NEVER cover, regardless of circumstances. This list is usually long and in small print.

Common exclusions: Cosmetic surgery, dental treatment, OPD consultations, self-inflicted injuries, war injuries, experimental treatments, fertility treatments.
Watch out: Mental health used to be excluded — IRDAI now mandates it be covered. If your policy excludes it, demand it be added at renewal.
Day Care Procedures
Important

Medical procedures that used to require overnight hospitalisation but now take less than 24 hours due to medical advances. Good policies cover these. Bad ones don't.

Examples: Cataract surgery, chemotherapy sessions, dialysis, minor fractures, certain laparoscopic procedures — all done and sent home in a day.
Watch out: Older policies (pre-2016) often excluded day care. Check how many day care procedures your policy covers — the list should be 500+.

See how your policy scores on these terms

Upload your policy PDF — we check all of this and more in under 60 seconds

Analyse My Policy →

These terms don't always affect claims directly but can make a significant difference at renewal time. Understanding these helps you negotiate better terms and avoid nasty surprises.

Bonus & Benefits
No Claim Bonus (NCB)
Good to Have

A reward for not making any claims in a year — your sum insured increases (or premium decreases) at renewal. Most policies give 5-50% bonus per claim-free year.

Example: Sum insured ₹5 lakh, NCB 10% per year, same premium.
YearEffective CoverExtra Cover Gained
Year 1₹5,00,000
Year 2₹5,50,000+₹50,000
Year 3₹6,00,000+₹1,00,000
Year 5₹7,00,000+₹2,00,000
Year 10₹10,00,000+₹5,00,000 free
Watch out: NCB resets to zero if you make even one claim. Some policies have NCB protection riders that preserve your bonus — worth asking for.
Restore / Reinstatement Benefit
Very Useful

If your sum insured is exhausted during the year, this benefit automatically tops it back up — either once or multiple times — so you're never left without cover.

Example: Sum insured ₹10 lakh. Two hospitalisations in the same year.
Without RestoreWith Restore
First claim (June)₹9,00,000 paid₹9,00,000 paid
Cover remaining₹1,00,000 left₹10,00,000 restored
Second claim (Sept)₹1,00,000 covered₹8,00,000 covered
You paid out of pocket₹7,00,000+₹0
Watch out: Some policies only restore for a different illness than the one that exhausted the cover. Read the fine print on restore conditions.
Sub-limits
Can Hurt

Caps on specific treatments or expenses within your overall sum insured. Even if you have ₹10 lakh cover, a sub-limit of ₹50,000 on cataract surgery means that's the max you'll get.

Common sub-limits: Cataract — ₹25,000-50,000. Knee replacement — ₹1-2 lakh. Ambulance — ₹1,000-5,000. These limits are often set years ago and not updated for inflation.
Watch out: Sub-limits are the most common source of claim shocks. Always ask for a complete list of sub-limits before buying.
Portability
Your Right

Your IRDAI-mandated right to switch your insurance policy from one company to another without losing the waiting period credit you have accumulated. You don't start from zero.

Example: You've been with Company A for 3 years. PED waiting period was 4 years. You port to Company B — only 1 more year of waiting period remains, not 4.
Watch out: Portability must be requested 45 days before renewal. The new insurer can still underwrite your application and may charge a higher premium.
Pre & Post Hospitalisation
Often Overlooked

Coverage for medical expenses before admission (tests, consultations, medicines) and after discharge (follow-up visits, medicines) — not just the hospital stay itself.

Standard: 30 days pre and 60 days post. Good policy: 60 days pre and 90-180 days post. This can cover several thousand rupees of expenses that most people pay out of pocket.
Watch out: These are often missed during claims. Keep all bills from 30-60 days before admission and submit them with your claim.
Network Hospitals
Check Before Admission

Hospitals that have a direct billing agreement with your insurer, allowing cashless treatment. Non-network hospitals require you to pay upfront and claim reimbursement later.

Tip: Every major insurer has 5,000-10,000+ network hospitals across India. But your local preferred hospital may or may not be on the list.
Watch out: Network lists change. A hospital that was on the network when you bought the policy may have been removed. Always verify before a planned hospitalisation.
Policy Structure
Individual vs Floater
Choose Wisely

Individual policy gives each person their own sum insured. Family floater gives one shared pool for the entire family — cheaper, but riskier if one member has a big claim.

Example: Floater of ₹10 lakh for family of 4. If your father has a ₹9 lakh surgery, only ₹1 lakh is left for the rest of the family for the entire year.
Watch out: Floater premium is based on the oldest member's age. Adding a 60-year-old parent to a floater can double your premium.
Grace Period
Don't Miss It

The number of days after your renewal date during which you can still pay the premium without losing your policy and accumulated waiting period benefits.

Standard: 15-30 days grace period. If you miss renewal and don't pay within this window, your policy lapses — and all your waiting period credit is gone.
Watch out: During the grace period, your policy is technically inactive. Any hospitalisation during this window may not be covered even if you pay the premium later.

Find out which of these your policy has

Our AI flags every gap, sub-limit, and missing benefit — in plain English

Analyse My Policy →

These terms are good background knowledge. They won't necessarily affect your next claim but understanding them makes you a smarter policyholder when talking to your broker or insurer.

Coverage Add-ons
OPD Cover
Nice to Have

Coverage for doctor consultations, diagnostic tests, and medicines without hospitalisation. Most standard policies don't include this — it's usually an add-on.

Reality check: The average Indian family spends ₹15,000-30,000 per year on OPD expenses. Having this covered is genuinely useful, especially with young children.
AYUSH Cover
IRDAI Mandated

Coverage for Ayurveda, Yoga, Unani, Siddha, and Homeopathy treatments in recognised hospitals. IRDAI now mandates that insurers offer this — but limits vary widely.

Example: Panchakarma treatment at an AYUSH hospital for ₹40,000 — covered under AYUSH benefit if your policy has it and you stay for 24+ hours.
Domiciliary Hospitalisation
Useful

Coverage for treatment taken at home when the patient cannot be moved to a hospital or the hospital doesn't have beds. Usually covered for 3+ days of continuous treatment.

Example: Elderly patient on home oxygen for 10 days — if hospitalisation was recommended but not possible, domiciliary cover kicks in.
Critical Illness Rider
Consider Adding

A separate benefit that pays you a lump sum if you're diagnosed with a specified serious illness — cancer, heart attack, stroke, kidney failure etc. — regardless of actual treatment cost.

Example: Critical illness rider of ₹20 lakh. Diagnosed with cancer — you receive ₹20 lakh as a lump sum to use however you want (income replacement, home modifications, treatment abroad).
Maternity Cover
Plan Ahead

Coverage for normal delivery, caesarean section, and newborn care. Almost always comes with a waiting period of 2-4 years and a fixed sub-limit.

Example: Maternity sub-limit ₹50,000, waiting period 2 years. Normal delivery in a private hospital today costs ₹80,000-1.5 lakh. Plan accordingly.
Air Ambulance Cover
Good to Have

Covers the cost of air ambulance evacuation in medical emergencies where ground transport is not possible or safe. Usually capped at ₹2.5-5 lakh.

Example: Trekking accident in Himachal Pradesh requiring helicopter evacuation to Delhi. Without cover, helicopter evacuation costs ₹2-5 lakh per hour.
Regulatory Terms
IRDAI
Background

Insurance Regulatory and Development Authority of India. The government body that regulates all insurance companies, sets minimum coverage standards, and handles policyholder grievances.

Why it matters: IRDAI sets minimum standards that all insurers must follow. When we compare your policy against IRDAI standards, we're checking if you're getting what you're legally entitled to.
IDV (for Car Insurance)
Car Only

Insured Declared Value — the current market value of your vehicle. This is the maximum amount you'll receive if your car is stolen or completely destroyed. It decreases every year as your car depreciates.

Example: Car bought for ₹10 lakh. After 3 years IDV might be ₹6 lakh. That's the most you'll receive on a total loss claim — even though you still feel the car is worth more.
Zero Depreciation (Car)
Worth Having

An add-on for car insurance that ensures the insurer pays the full cost of replacing parts without deducting depreciation. Standard car insurance deducts 40-50% for older parts.

Example: 4-year-old car. Accident damage repaired.
Part ReplacedActual CostWithout Zero DepWith Zero Dep
Bumper₹20,000₹10,000₹20,000
Headlights₹15,000₹7,500₹15,000
Bonnet₹25,000₹12,500₹25,000
You pay₹60,000₹30,000₹0
Free Look Period
Buyer Protection

A 15-30 day window after buying a new policy during which you can cancel it for a full refund if you're not satisfied, no questions asked. IRDAI mandates this for all policies.

Tip: Always read your new policy document within the free look period. If something doesn't match what your agent told you, cancel and ask for a full refund.

Now check your own policy

See exactly which of these terms your policy has, which are missing, and what to fix

Analyse My Policy →
PolicyDr.com  ·  Know Your Policy  ·  Privacy Policy  ·  Terms of Use  ·  Refund Policy