Health Insurance 101

Health insurance is a kind of insurance wherein the insurancecompany pays the medical costs of the insured individual if theindividual in question falls ill due to covered causes, or dueto accidents. The insurer may be a private organization or agovernment agency. The major purpose of health insurance is tocover medical expenses and any lost income while the individualis not well and unable to function normally.There are different types of health insurance policies. The twomost common ones are major medical and disability insurance. Amajor medical health insurance policy provides benefits forsickness or injury, irrespective of whether the care is providedat a doctor's office, clinic or hospital. The types of sicknessand injury covered are typically broad, although there arealways limitations that you may want to discuss with your agentprior to purchasing the coverage. Major medical policiesnormally have an annual deductible and a lifetime maximum amountof benefits that will be paid.Even if you are covered by a group insurance at work, you mightconsider taking an individual policy if you may change jobssoon, or if certain benefits that are not provided in the grouppolicy.A deductible is an annual amount that you will have to pay perinsured person, before the insurance company begins to pay onyour bills. There is an upper limit for the maximum amount ofdeductibles you will have to pay in a given year.In a health policy, coinsurance refers to the percentage of themedical bills that the insured individual will have to pay afterthe deductible is met. Usually the health policy would have aprovision called a 'stop-loss' - this is the maximum amount youwill have to pay for covered medical bills.