Health insurance exemplifies a pre-planned effort for risk mitigation and safeguards oneself from unplanned medical expenses as spelt out in the policy. An insurance policy is a product that you need to buy from the sellers of insurance, commonly referred to as insurance providers. The policies cover the expenses for pre-specified medical conditions.
The buyers purchase the policies through periodic payment better known as premium that continues for pre-set time duration. Usually, the individuals purchase the health care insurance but in some countries, the citizens are offered the same by the government.
History of Health Insurance
It was 1850 when the first health insurance policy was made available to the mining and railway workers in the form of accident insurance. Under the provided coverage, the workers were prevented from having to incur cost for medical service in the event of an accident. This first insurance product gave rise to a variety of modern insurance plans each of which is aimed at protecting the buyers from havoc medical costs for the illness as specified in the policies.
Insurance is a common purchase throughout the length and breadth of the world. Most of the people are aware of the benefits they can gain from purchase of insurance. However, all of them might not be familiar with insurance jargon frequently used in the policy agreement or by the insurance companies or their agents. So, before you shell out money for a product buy, you need to familiarize yourself with the different terms pertaining to the cost and benefits. Let us describe them one by one.
Coverage: This refers to the maximum benefits provided by the insurance companies for the well-being of the purchasers.
Premium: This is the amount of periodic installment made by the insurance purchasers to the companies for the coverage included in the policy.
Deductibles: This is what the insured is obliged to pay before insurance seller starts paying expenses in an annum. This might be a flat sum which the insured individuals have to spend before they get coverage for expenses. Co-Payment is a related term in this context. The insured are to pay this amount as a part of their visiting a medical professional. The insured pay for the sum out of their own pocket.
Comprehensive and Scheduled Insurance: Under a comprehensive insurance plan, medical cost is borne by the company only after the insured pay for the deductibles. Usually, catastrophic events and day-to-day expenses are covered under such policy. Scheduled policies pay for the cost only up to a limited extent as clearly written in policy agreement. Due to their restricted nature in terms of coverage, scheduled insurance plans are often considered to complement the comprehensive insurance policies.