Your Guide To Good Health Insurance

If you want to spark a spirited debate at your next social gathering, just try bringing up the subject of health insurance.  You will undoubtedly set off a firestorm of opinions.

Years ago, acquiring your first health coverage was almost a right of passage.  You began your career and you were automatically enrolled in your employers health plan after your first 90 days of employment.
That still takes place today but the health care industry has metamorphosed into a gigantic monster gobbling up resources everywhere it travels.  Rates keep going up at an astounding pace and more employers are cutting back on their plans or doing away with their health benefit packages entirely.

Naturally, no one document will tell you everything you ever wanted to know about health insurance.  When it comes to health insurance there is no “one size fits all.”  However, what will do is provide with enough knowledge to weigh the options and make informed decisions regarding your own circumstances. 

The most important tool you can have when looking for good health insurance is knowledge.   Unfortunately there aren’t too many places where you can obtain that knowledge without having to spend months wading through the small print. 

So, before discussing the various plans that are available,  we must first grasp an understanding of the complex nature of health insurance.  Therefore, our first chapters are written specifically to help you understand the terminology and different components involved so that you can make those informed decisions and present it in plain English.  Let’s get to it!

DIFFERENT TYPES OF HEALTH INSURANCE POLICIES

Health insurance is a legal contract between two or more parties that promises certain performance in exchange for considerations.  A health insurance policy is considered a unilateral contract.  This is because only one party (the insurer) is required to fulfill their obligation.  While a policy owner may decide to terminate premium payments, as long as the payments are paid the insurer must meet their responsibility under the contract.
A health insurance policy can provide just one or any combination of certain benefits:

• Hospital, medical and surgical expenses resulting from sickness or an accident
• Accidental death or dismemberment
• Disability resulting from accident or sickness (sometimes this can also be referred to as “loss of income” or “loss of time”

An accident is an injury that occurs accidentally.  A sickness is an illness or disease that is not the result of an accident.  Knowing the difference is important because policies may have different provisions that apply to accidents or sickness.  Also, there are some companies that sell a separate accident policy that does not include sickness.

The terms accident and sickness are widely used and often interchangeable in any discussion of health insurance.  They are often abbreviated as A&H and A&S.  Health insurance is also referred to as medical insurance. 

As we discussed above, health insurance is designed to protect again two types of economic loss.  Loss of income and expenses for medical care which places them in either of two broad policy categories:

• Disability income policies
• Medical expense policies

Disability income policies can also be referred to as loss of income, loss of time or replacement income.  This type of policy will pay benefits to an insured who is disabled and can no longer work to earn a regular income.  Payments can be weekly or monthly depending on the policy.

Medical expense policies are represented by a wide range of coverage from very minimal to comprehensive packages with multiple coverage.  Some include both accidents and illnesses, various hospital expenses and other costs pertaining to medical care such as:

• Accident and sickness policies
• Hospital policies
• Basic medical expense policies
• Major medical expense policies
• Comprehensive medical expense policies

Any of these policies might cover various combinations of the above and may be paid in a lump sum.
Accident Policies.  Some policies cover only accidents and not illness.   As you might imagine, policies like this are very specific about what is considered an accident.