Health Insurance Definition and How It Works - Easy Explanation

What is health insurance?

Health insurance is a type of insurance that covers medical and surgical expenses of an insured person. Also prescribed drugs and dental expenses are included sometimes. Health insurance pays medical and surgical expenses directly to the care providing institution.

Points to be noted about health insurance

When you are about to purchase health insurance for you or your family members, make sure that you or your family members are getting the highest benefits from health insurance. You may check out the service quality, deductibility and coverage before purchasing health insurance.

Keep in mind that most of the health insurance companies have their own service network area. They have some selected medicals where you can only get medical treatment. Also, their services are limited to some particular diseases. So, you must check the terms and conditions carefully.

Before buying health insurance, you must read the policy again and again. If there is any question, you must make your concept clear. If your concept is not cleared, then you will suffer in the long run.

Depending on your monthly income, you must choose the perfect plan for your family members or for you. If you become fail to choose a perfect plan, maybe in future you won't be able to continue health insurance.

How health insurance works

As a policyholder, you may take the highest level of care from the network of designated healthcare providers that are listed in the terms and conditions. If you seek care outside the network of the list that is included in the terms and conditions of health insurance, then you will have to pay a higher percentage of the cost. But most of the times services outside their network is rejected.

Sometimes insurance company refuse to pay for unauthorized services and also some drugs cost if there are any alternative drugs available in the market place with low cost than your selected drugs. So you must check the terms and conditions very carefully by taking the help of employers of the insurance company.

Depending on the deductible, you will get your health benefit. A higher deductible means higher health benefit. But you must try to find those health insurance companies that have the lowest deductible and highest health coverage.


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