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7 Important Health Insurance Terms You Need To Know

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Neil McCormick, Head of the Insurance Division at Lifestyle Insurance, has the lowdown

If you’d like to receive care at private hospitals or clinics in Hong Kong, you’ll most likely need private health insurance to cover the ever-increasing costs. However, navigating health insurance jargon can be overwhelming. Read the seven most important terms that everyone needs to know:

1. Premium: The premium is the amount that you pay for your coverage. Each insured person’s premium is primarily based on factors such as age, choice of coverage and health conditions.

It’s important to note that premiums are adjusted annually, in line with medical inflation and the performance of the insurer’s portfolio. This will be in addition to any age-related increase, but your own claims will not affect the renewal premium.

2. Deductible: Adding a deductible to your policy is a cost-saving mechanism that is normally optional. This is a fixed amount you agree to pay out of your own pocket for eligible treatment expenses before the insurer will reimburse the remaining expenses. The level of premium discount will depend on the deductible you choose, with options ranging from US$100 to US$10,000. Usually, this will be applied per person per policy year.

3. Benefit limits: There are three main types of
benefit limits:

i. The overall annual maximum or headline limit – the maximum amount the insurer will pay in total for all benefits, for each person covered by the policy, in each policy year.

ii. Annual limits for a group of benefits – the maximum amount the insurer will pay in total for all the benefits in that group, such as out-patient.

iii. Individual benefit limits – the maximum amount the insurer will pay for individual benefits, such as physiotherapy.

4. Pre-authorisation: This will usually only be required for certain services, such as hospital benefits. Once pre-authorisation has been requested the insurer will determine whether a service is medically necessary and appropriate, including consideration of the need for the proposed level of care and the availability of alternatives.

5. Inpatient: Medically necessary treatment which normally means you must stay in a hospital bed over night or longer. Some insurers may use a broader term for this benefit, such as hospitalisation and surgery.

6. Outpatient: Treatment provided at a practice/ clinic of a medical practitioner or outpatient department at a hospital that does not require you to be admitted to hospital to stay overnight or as a day-patient to receive treatment.

7. Waiting period: This means that you cannot make a claim for a particular benefit, such as maternity, until you have been covered by the policy for the full duration of the waiting period. Generally, a waiting period will begin at the commencement of your policy if the benefit has been included in your chosen coverage.

While there is a lot to consider when choosing a plan that meets your needs and your budget, with the guidance of a professional insurance broker a tailored solution is only one step away.

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