Health Insurance 101

Health insurance is a kind of insurance wherein the insurance
company pays the medical costs of the insured individual if the
individual in question falls ill due to covered causes, or due
to accidents. The insurer may be a private organization or a
government agency. The major purpose of health insurance is to
cover medical expenses and any lost income while the individual
is not well and unable to function normally.

There are different types of health insurance policies. The two
most common ones are major medical and disability insurance. A
major medical health insurance policy provides benefits for
sickness or injury, irrespective of whether the care is provided
at a doctor's office, clinic or hospital. The types of sickness
and injury covered are typically broad, although there are
always limitations that you may want to discuss with your agent
prior to purchasing the coverage. Major medical policies
normally have an annual deductible and a lifetime maximum amount
of benefits that will be paid.

Even if you are covered by a group insurance at work, you might
consider taking an individual policy if you may change jobs
soon, or if certain benefits that are not provided in the group
policy.

A deductible is an annual amount that you will have to pay per
insured person, before the insurance company begins to pay on
your bills. There is an upper limit for the maximum amount of
deductibles you will have to pay in a given year.

In a health policy, coinsurance refers to the percentage of the
medical bills that the insured individual will have to pay after
the deductible is met. Usually the health policy would have a
provision called a 'stop-loss' - this is the maximum amount you
will have to pay for covered medical bills.