Every insurance clause, explained plainly

The plain-language library of the clauses, waiting periods, and benefits that decide whether your claim gets paid.

• Room rent cap — A room rent cap is a limit on how much your health insurer will pay per day for your hospital room. If you choose a room that costs more, you pay the difference, and in many policies the insurer also cuts every other bill in the same proportion.
• Co-pay — A co-pay is the share of an approved claim you agree to pay yourself, expressed as a percentage. If your policy has a 20% co-pay and the approved claim is Rs 1 lakh, the insurer pays Rs 80,000 and you pay Rs 20,000, on every claim the co-pay applies to.
• Sub-limit — A sub-limit is a cap on how much your policy pays for a specific treatment or expense, even though your total sum insured is larger. For example, a cataract sub-limit of Rs 40,000 means the policy pays at most Rs 40,000 for that surgery regardless of your Rs 10 lakh cover.
• Deductible — A deductible is a fixed amount you pay before your insurance starts paying. With a Rs 1 lakh deductible, the insurer covers costs only above Rs 1 lakh. Deductibles are common on top-up and super top-up plans and on some voluntary-deductible health policies.
• Pre-existing disease (PED) waiting period — A pre-existing disease (PED) waiting period is the time you must hold a policy before conditions you already had when buying are covered. During this window, claims arising from those conditions are excluded. IRDAI has been reducing the maximum length of this waiting period in recent years.
• Initial waiting period — The initial waiting period is a short window at the start of a new health policy (commonly around 30 days) during which only accident-related hospitalisation is covered. Illness claims raised in this window are usually excluded, to prevent buying cover only after symptoms appear.
• Disease-specific waiting period — A disease-specific waiting period is a fixed period (often around two years) before the policy covers certain named conditions and planned surgeries such as cataract, hernia, some joint replacements, and specified ENT or gynaecological procedures, even if the condition is not pre-existing.
• Restoration benefit — A restoration (or refill) benefit tops your sum insured back up after it is used up during the policy year, so a second unrelated hospitalisation still has cover. The trigger, whether it applies to the same illness, and how many times it refills all vary by policy.
• No Claim Bonus (NCB) — A No Claim Bonus rewards you for a claim-free year. In health insurance it usually increases your sum insured at no extra premium; in motor insurance it is a discount on your own-damage premium. Making a claim can reduce or reset the accumulated bonus.
• Permanent exclusions — Permanent exclusions are treatments and situations a policy never covers, no matter how long you hold it. These are listed in the policy wording and commonly include cosmetic surgery, most dental and vision unless from an accident, and treatments arising from specified excluded causes.
• Free-look period — The free-look period is a window after you receive a new policy during which you can review it and cancel for a refund if you disagree with the terms. IRDAI mandates this window for life and health policies; the exact length has been revised in recent norms, so check the current figure.
• Grace period — The grace period is extra time after your renewal due date to pay the premium without losing continuity benefits such as waiting-period credit. If you pay within the grace period, your policy is treated as continuous; if it lapses, you can lose accumulated credits.
• Day-care procedures — Day-care procedures are treatments that need hospitalisation for less than 24 hours because of technology, such as cataract surgery, dialysis, chemotherapy, and many others. Good policies cover a wide list of these even though the usual rule requires a 24-hour admission.
• Moratorium period — After a continuous coverage period defined by IRDAI, a health policy enters a moratorium: the insurer can no longer contest a claim on the ground of non-disclosure or misrepresentation, except in cases of proven fraud. It protects long-standing policyholders from late rejections.
• Insured Declared Value (IDV) — IDV is the maximum your motor insurer will pay if your vehicle is stolen or written off. It is roughly the current market value after depreciation, not what you originally paid. A higher IDV means a higher payout at total loss but a slightly higher premium.