4 Basic Insurance Terms You Need To Know

4 Basic Insurance Terms You Need To Know

Dealing with health care insurance for the first time can be very confusing, so we’re going to give you a crash course in all terminology you can encounter while shopping for private health care insurance. Gathering relevant information about insurance can help you when you have to decide on a perfect insurance plan for you or for your family. It’s hard to predict all the possible scenarios that can happen during one’s lifetime. That’s where private health insurance comes in. It covers different accidents and medical injuries that are fairly common and can easily happen to anyone. Take a look at our list below and check your knowledge. These are all very basic, but useful terms for someone who is considering purchasing private health insurance.

Premiums

An insurance premium is money you or your employer pay to the insurance company in exchange for their services i.e. their coverage of medical expenses in case you get ill or injured. Not all of the expenses will be covered, this mainly depends on the insurance you decide to purchase. The amount of money you or your employer spend on health insurance is going to exceed the cost of your treatment. If you are younger than 26, you are probably covered by your parents’ health insurance if they decide to pay your premiums when buying private health care insurance. Premiums are often paid monthly if you are insured by your employer. If on the other hand, you have to buy it yourself, you’ll probably have to pay the full price.

Furthermore, there are options for children with disabilities that can make their lives easier. For instance, disabled children family cover is very important for families that want to provide the best medical care to their children, but need some sort of financial support. Children require special care, and a lot of understanding and support, so it’s important that you find a plan that covers the most. Find the right one for your children and help them lead a healthy and happy life, with the aid of a tailored management plan created for every child separately.

Deductible

A deductible is a fixed amount of money you have to pay every year before the insurance company starts to pay for the services you need. If you choose a family plan, you’re probably going to pay a deductible for yourself and for family members. If your deductible is $2,000 that means that you pay all hospital bills until they reach $2,000. If a doctor prescribes you drugs your health care plan may have a separate deductible for it. After you pass the threshold of your deductible you usually pay coinsurance.

Coinsurance

Coinsurance is the amount of money you pay after you reach your deductible amount. You and the insurer share the cost of your medical expenses. It can be anything from 70/30 split to 90/10. If for example, your split is 80/20 it means that you pay 20% of your medical bills whereas your health care provider pays for 80% of the expenses. When choosing a health care plan make sure to look for a maximum amount of money you can pay in a chosen period. If your plan includes a lower premium it will have a higher coinsurance and vice versa.

Copay

Unlike coinsurance, copayment is a specific amount of money you agree to pay for your medical bills and not a percentage of the bill. Just like coinsurance, the copay is paid after you meet your deductible. The amount of money you pay for copayment depends on several different factors. If you need to visit the emergency room your copayment will probably be the highest, unlike when you are going for a regular checkup. When choosing the right plan for private health care insurance you should think about the amount of money you are willing to pay upfront for a deductible. If you choose to pay more for a deductible your copayment will in all likelihood be lower.

Private health insurance is a great backup plan and additional support for every family or individual. Do your research and find out what kind of insurance plan is the right one for you. You can choose from a variety of insurance policies to see which one meets all of your needs. There are certain treatments and medication that are excluded from some insurance plans, so you need to check what exactly is available for you within a particular insurance plan.

 

We hope that these insurance terms in the text were already familiar to you. If not, it’s important to understand them before spending money on health insurance. Would you recommend private health insurance to your friends or would you rather opt for s option? Tell us all about your experience with insurance in the comment section below.

 

HealthStatus Crew

HealthStatus teams with authors from organizations to share interesting ideas, products and new health information to our readers.
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HealthStatus teams with authors from organizations to share interesting ideas, products and new health information to our readers.

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