Health Insurance Basics

Limits, Exclusions, Copayment and Waiting Period

May 22, 2015

Whenever you are evaluating any health insurance product, you must keep an eye for four key aspect of the insurance cover that play a very critical part in the overall quality of the cover. Not all covers are the same, and you should be aware that different companies use different approaches to optimize their products.

The Cover Limit

Every cover will have limits. A limit is the maximum amount of money you can spend based on your current policy. The main limits you need to keep an eye on are the inpatient and the outpatient limits. The inpatient limit is the total amount of money available for use when you are hospitalized. The outpatient limit on the other hand refers to the amount of money you can spend on clinics and other non-residential care centers approved by your insurer. Other critical limits that you need to know include the dental cover limit, the optical cover limit, and congenital cover limit, among others.


It is very important to understand the exclusions associated with any insurance policy before buying it. Insurance companies use limits to protect themselves against financial ruin in the unlikely situation that many policyholders make claims within a certain period. Some of the exclusions are based on the non-medical services one may intend to access using their medical cover. These services include elective cosmetic surgery, alternative -medicine services such as acupuncture, and non-clinical health interventions. In addition to these, medical insurance companies also exclude medicines, even if prescribed, that are classified as supplements. Cosmetics also are not included in a medical cover, unless needed for medical purposes.

Related: 5 Ways to Get Affordable Health Insurance Quotes

Co Payment

One other strategy that insurance companies use to control their costs includes the concept of copayment. Copayment works for clients who want to access services from specialists or from certain high-end medical facilities that have higher costs of care. The use of this system enables health insurance companies to include high-end medical facilities in their panel of hospitals. It enables Insurance companies to transfer some of their liability to policyholders who want to access these high-end institutions. When you take out a medical cover, be keen to study the copayment policy of the health insurance company to understand what it will cost you to access high-end hospitals, over and above the costs covered by your policy.

Waiting Period

The concept of a waiting period arises from the need to mitigate the risk of someone seeking insurance after falling ill. One of the cardinal principles of insurance is risk. Something certain ceases to be a risk, and as such it is not insurable. In this regard, insurance companies have different policies relating to the waiting period for core services and chronic illnesses.

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