Let us break down the jargon for you and explain what these commonly used health insurance terms mean, in plain English.
These definitions are for your information only and do not represent the terms and conditions of any particular AIA plan. You should refer to your Policy Contract for any definitions specific to your policy.
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Confinement |
Benefits offered on a ‘per Confinement’ basis relate to an individual incidence of hospitalisation, rather than an individual accident or illness. Confinement is defined as admission in a Hospital for a minimum period of 6 hours upon the recommendation of a Registered Medical Practitioner and continuous stay in a Hospital prior to the Insured’s discharge. Confinement may not include Day Surgery depending on your plan.
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Deductible and co-insurance |
In an insurance policy, the deductible is the portion of any claim that is not covered by the insurance provider. The deductible portion is usually a fixed amount that you have to pay first before the policy benefits are paid, up to a stipulated deductible limit each policy year. Co-insurance is the percentage of the medical bill that you have to pay after deducting the deductible amount. Here’s a simplified example:
Deductible amount = S$2,000
Co-insurance = 10%
Medical bill is S$5,000
Assuming no benefit, policy year, or other limits apply,
the insurance company will reimburse you for:
(S$5,000 - S$2,000) x 90% = (S$3,000 x 90%) = S$2,700
You will pay:
S$2,000 deductible + S$300 (co-insurance) = S$2,300
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Exclusions |
Most health insurance plans describe exclusions. These are things that will not be covered under the plan. A typical exclusion is that of pre-existing conditions.
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Insured Amount (also referred to as “Principal Sum”) |
When you sign up for a plan, you decide how much you want to be insured for (the Insured Amount). This may apply in total or to individual benefits, and it determines the amount(s) you may claim for. Your Insured Amount influences the amount of premium you will have to pay.
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Pre-existing Condition |
If you have a serious ailment or have been treated for a medical problem before you apply for health insurance, your insurance company could classify this as a ‘pre-existing condition’. This could make it difficult for you to be accepted into a medical insurance scheme, or the insurance company might not cover you for claims relating to the pre-existing condition. For example, AIA Complete Critical Cover is a plan that offers a lump sum payout in the event of being diagnosed with a critical illness, such as cancer. But if you already have cancer when you sign up for the plan, that would be judged to be a pre-existing condition and you may not be eligible to make a cancer related claim. This underlines the importance of signing up for health insurance when you are still healthy.
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Reasonable and Customary Charges |
Charges are considered ‘Reasonable and Customary’ when they are charged for treatment, supplies or medical service that is medically necessary to treat the Insured’s condition, and are in accordance with the standards of good medical practice provided by a registered medical practitioner. Reasonable and Customary charges would not exceed the usual level of charges for similar treatment, supplies or medical services (a) in the locality where the fee or expense is incurred, or (b) based on Singapore standard charges, depending on your plan; and would not include charges that would not have been made if no insurance existed.
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