What Is Health Insurance and How Does It Work?

The importance of a health insurance plan is a no brainer for us. Health Insurance benefits attract mass popularity due to its protection from relatively high prices of health care. Moreover, it often helps you with the payment of checkups, hospital stay, medication payments as well as for important preventive care.

Investment in health insurance plansrequires the policyholder to either pay some or all the healthcare costs in the exchange of a premium. In order to provide you with more coverage, you are not only offered with care from providers in your health plan network but also pharmacies in your plan’s pharmacy network. Keep reading further in order to understand the working of health insurance in depth:

What is Health Insurance?

Health Insurance is a contract between the insurance company and the policyholder. Since it requires premium payment by the policyholder to the insurance company, the contract is thus, limited to its term. Additionally, the insurance company is in charge of all the medical cost of the policyholder and his family as well as the critical illness cover.

When you invest in health insurance, the insurance companies not only calculate the likelihood and costs of numerous medical treatments but also fix an annual premium rate that is supposed to be paid by the policyholder. Typically, these health insurance policies are available for both: an individual as well as his family. Besides, there are stand-alone insurance providers as well as government-sponsored insurance providers.

Take a look at these important components of Health Insurance Policy:

  1. Insurance premium
  2. Co-payments
  3. Co-insurance
  4. Deductibles
  5. Coverage limits
  6. Exclusions
  7. Provider panels
  8. Out of pocket maximums
  9. Explanation of Benefits (EOB)
  10. Pre-authorizations

How does it work?

  1. Choose the variants of your plan

When you invest in a health insurance plan, it offers you with certain variants to select from. These variants are tailored to suit the different needs of the policyholder and are in the form of critical long-term health care, family health insurance, etc. See to it that you choose the appropriate variant according to your needs.

2. Choose your cover

This step can be undertaken only once you have chosen the variant of your policy. Choosing the variant helps you in determining the sum assured for you and your family.

3. Choose the term of your policy & premium payment

An investor can easily choose the term of his policy based on the variant that he has opted for. Moreover, the term of your premium payment depends on the variant as well.

4. Choose the frequency of your premium payment

Typically, an insurance company might allow the frequency of premium payment based on multiple options.You can opt for annual payment, quarter payment, month payment, and half yearly payment. Additionally, these premium are based on the age, gender, sum assured, selected variant, term of the policy, and term of policy payment of the investor.

How to apply for a Health Insurance Plan?

It is necessary to follow the procedure given below in order to apply for a health insurance policy. Once you follow the right steps, you’ll land up with an appropriate plan suited for you and your family needs.

  1. Contact the company

Contact the insurance company in order to confirm the plans and the actions to be taken.

2. Get the details of the person

After you’ve contacted the company, note down the name of the person, his address and a phone number of the person you spoke to. This will simply ensure that you’re taken seriously and you are more than just a complaint to the opposite party.

3. Keep your documents handy

Keep all the necessary documents handy in order to make the payment of the premium.

4. Do not give up

If there is a disagreement between you and the insurance company, then do not hesitate to take the matter to the superiors for clarification.

Now that you have finally understood the working process of a health insurance policy, see to it that you invest in the right plan for optimum utilization. As health is your prime focus, do not mess with it and hurry to avail the best offers as well as advantages of a policy. In the end, all we want is for you to live a happier and healthier life.

Author: Eddy

Eddy is the editorial columnist in Business Fundas, and oversees partner relationships. He posts articles of partners on various topics related to strategy, marketing, supply chain, technology management, social media, e-business, finance, economics and operations management. The articles posted are copyrighted under a Creative Commons unported license 4.0. To contact him, please direct your emails to editor.webposts@gmail.com.