Understanding Insurance

Individual Health Plan Types

Many health carriers sell policies to individuals directly, in much the same way that personal automobile and homeowners insurance is sold. An individual policy may cover the coverage purchaser only, or extend to the person´s spouse and / or dependent children. These policies can be a good option for people who do not work for a company that offers a health plan, or are self employed, and are unable to obtain coverage through another source.

When considering a health plan, be sure you understand the full extent of the coverage that is included. If you have more than one option, choose the one with the highest level of coverage you can afford. The higher a plan´s deductibles, copays, and coinsurance, the more you can usually save on premiums. However, you´ll also have to pay more out of pocket for claims. Some of the most common types of individual health policies include:

Major Medical

Also often referred to as comprehensive coverage, a major medical policy provides benefits for most medical expenses, up to a certain maximum amount whether an individual receives services in or out of the hospital. The policy contract may contain coverage limits on specific types of charges or treatment options, and will probably contain provisions for deductible and / or coinsurance amounts, which are amounts the insured person must contribute out-of-pocket toward the cost of care. When used in a generic sense, the terms "health coverage" and "health insurance" typically refer to coverage under a major medical policy.