Jargon Decoder

At a network hospital, the insurer settles eligible costs directly with the hospital, so you don't pay the full bill yourself. Approval depends on the policy terms.

A fixed percentage of each claim that you pay yourself, with the insurer paying the rest.

ExampleWith a 20% co-pay on a ₹1 lakh eligible bill, you pay ₹20,000 and the insurer pays ₹80,000.

Vehicle insurance that includes third-party cover plus damage to your own vehicle from listed events like accidents, theft or fire.

An amount you pay first, before the insurance starts paying for a claim.

Situations, treatments or events a policy does not cover. They are listed in the policy wording.

One health policy covering several family members, who share a single sum insured each year.

A short window after you receive a new policy when you can review it and return it if it doesn't suit you, as per the rules.

Extra time after the due date to pay your premium without the policy lapsing. The length depends on the policy.

Roughly the current market value of your vehicle. It is the most you'd receive if the vehicle is stolen or damaged beyond repair.

A reward for a claim-free year: a discount on the next premium (vehicle) or extra cover (many health policies).

The person you name to receive the policy or investment amount if you die. Keep nominees up to date.

A health condition you already had before buying the policy. It must be declared, and is usually covered only after a waiting period.

The amount you pay the insurer, usually every year, to keep your policy active.

An optional add-on to a policy, such as accidental death or critical illness cover, bought for an extra premium.

A cap on the hospital room charges a health policy pays per day. Choosing a costlier room can reduce what is paid for other parts of the bill too.

The maximum amount an insurer will pay for covered claims in a policy year (health) or for a covered loss (home, vehicle).

ExampleWith a ₹5 lakh sum insured, claims in that year are paid up to ₹5 lakh in total, subject to the policy terms.

Life insurance that offers protection only, for a fixed period. It pays your nominee if you die during the term.

Vehicle insurance for damage or injury you cause to other people or their property. It is the legal minimum in India.

A set time after buying a policy during which certain conditions or benefits are not covered. Existing illnesses and maternity often have one.

ExampleIf a policy has a three-year waiting period for existing conditions, claims for those conditions are covered only after three years of continuous cover.

A vehicle add-on that pays for replaced parts without deducting for their age and wear, subject to its conditions.

Earning returns on your past returns as well as on the money you put in. Its effect grows with time.

The total amount of money you build up for a goal, such as retirement or a child's education.

A mutual fund that invests mainly in bonds and similar instruments. It usually moves less than equity funds, but still carries risk.

Equity Linked Savings Scheme: an equity mutual fund with a three-year lock-in that can qualify for a tax deduction, subject to tax rules.

A mutual fund that invests mainly in company shares. It can grow over long periods but can also fall sharply.

A fee some mutual funds charge if you withdraw within a set period after investing.

The yearly fee a mutual fund charges to manage your money, shown as a percentage of your investment. It is taken from the fund's value.

A mutual fund that invests in a mix of shares and bonds, in proportions set out in its scheme documents.

The rate at which prices rise over time. It means the same amount of money buys less in future.

ExampleAt 6% inflation, something that costs ₹1,000 today would cost about ₹1,791 in ten years.

How long you plan to stay invested before you need the money.

Know Your Customer: the one-time identity and address check needed before you invest in mutual funds.

Investing a larger amount in one go, instead of in regular instalments.

The price of one unit of a mutual fund on a given day. A high or low NAV alone doesn't make a fund expensive or cheap.

How much your investments can go up and down before it affects your plans or your peace of mind.

Investing a fixed amount in a mutual fund at regular intervals, usually monthly. It does not guarantee returns.

ExampleA ₹5,000 monthly SIP buys more units when the NAV is lower and fewer when it is higher.