What is health insurance?
Simply put, health insurance is protection against
medical costs. A health insurance policy is a contract between an insurer and an
individual or group, in which the insurer agrees to provide specified health
insurance at an agreed-upon price (the premium). Depending on your policy, your
premium may be payable either in a lump sum or in installments. Health insurance
usually provides either direct payment or reimbursement for expenses associated
with illnesses and injuries. If your employer does not offer a health insurance
plan, you may wish to purchase health insurance on your own.
Why do you need it?
Let's face it--health insurance is a necessity in
today's world. The costs of medical care and treatment have soared to new
heights in recent years and are expected to rise even further in the years to
come. Think for a moment about the enormous medical costs you would incur if you
suffered a major injury tomorrow or were suddenly stricken with a
life-threatening illness. Uninsured people live with such risk every day of
their lives; health insurance can shield you from that risk. Even if you're
healthy today and have never had any major problems in the past, you simply
can't predict the future.
In addition to medical emergencies, routine
conditions requiring visits to a physician happen all the time. This is
especially true if you have children. Ear infections, rashes, and high fevers
are commonplace with infants and children; numerous trips to the doctor can be
pretty expensive without health insurance.
What do you need to know?
You should know where to get health insurance, and
understand the various types of private health insurance that are available.
There are some important differences between indemnity plans, HMOs, PPOs, and
POS plans worthy of understanding.
You should also make every effort to understand
your own health insurance policy, and become familiar with common health
insurance provisions, including limitations, exclusions, and riders. It's
important to know what your policy covers, and what you'll have to pay for in
When comparing health insurance policies, you
should strive to balance coverage against cost. While price is an important
consideration, there are also other factors that may influence your decision
when it come to choosing a health insurance plan.
Understanding the taxation of health insurance
benefits and premiums is also an important issue, especially if you're
Being aware of your COBRA rights, in the event
that you lose your health insurance coverage due to a change in employment or
other factors is also worth investigating.
When to get it
you don't have health insurance
right now, you should seriously
consider purchasing it as
soon as possible. No one can
predict the future--you don't
know when you might suffer
an accident or become seriously
ill. Health insurance can
help to protect you against