Health insurance is one form of insurance. It helps people in collectively pooling their risk to help them to recover part or all of the money lost during some kind of disaster. It can be made out against fire and other natural hazards; it can be made to insure goods, property as well as life. Health insurance is a method by which people can insure themselves and their loved ones against any kind of illness. In case of an illness, it is the company itself meets all the medical bills and other costs relating to the illness.
This helps people to avoid the risk of huge medical bills in case of an accident or some disease. The collective that is formed can be both non-profits as well as made by some profit seeking company. It can also include other serious issues like disability. They also provide long-term facility for nursing and other care needed to protect and cure people. The organizations that provide such facility are set up by both government and some other private institutions. It can be purchased to cover an individual or a group of people, for example, when a company makes out a health benefit plan for its entire staff.
The health insurance works like any other insurance. In this case, people have to pay a fee or premium for private organization and tax in case of a government organization. This has to be done periodically. This is done with the intention of protecting themselves from future unexpected problems relating to health. In return the company provides financial assistance when the person meets any kind of accident or other kind of medical issue. Some countries also have medical health center which are funded by the government.
The company evaluates the individual’s health and calculates the over all risk the person is subjected to in regards to his health. This helps them in coming up with an appropriate premium which has to be paid by the individual at regular interval. The policy can be made for any number of years. The policy is also renewable after the expiry of the contract. The policy states the cost of health care and also details the issues that are covered by them.
Individuals are required to read the policy in detail and make a sound decision. The policy is detailed and may have lot of loop holes. Not all medical policies cover all kind of health issues. The individuals need to cover these before signing the contract. There are also details of what the person insured is obligated too. This also must be read carefully and taken care of. Insurance company may also have a deductible. This is the amount that the individual has to pay. Any amount that is required after the deductible is paid by the company. For example if the company has a policy which includes a $ 100 deductible, this means that the individual has to pay the bill till $ 100 and any other charges after this will be paid by the insurance company.