Health insurance is a legal contract among two or more parties that promises certain performance in exchange for considerations. A health insurance policy is measured as an independent contract.
This is for the reason that only one party (the insurer) is required to fulfill their obligation. While a policy owner may decide to terminate premium payments, providing the payments be paid the insurer must meet their responsibility under the contract.
A health insurance policy can provide just one or any combination of certain benefits:
- Hospital, medical and surgical costs resulting from sickness or an accident.
- Accidental death or dismemberment.
- Disability caused due to accident or sickness (sometimes this can also be referred to as "loss of income" or "loss of time".
An accident is an injury , which occurs accidentally. A sickness is an illness or disease that is not the effect of an accident.
Since policies may have different provisions that apply to accidents or sickness, knowing the difference is important. Also, some companies sell a separate accident policy that does not comprise sickness.
There are two basic types of health insurance:
- Indemnity plans, sometimes-called fee-for-service or traditional medical insurance.
- Managed care plans, healthcare plans for example HMOs, PPOs and POSs.
In any discussion of health insurance, the terms accident and sickness are widely used and often interchangeable. They are often abbreviated as A&H and A&S. Health insurance is also referred to as medical insurance.
In order to protection two types of economic loss, Health insurance is designed. Loss of income and expenses for medical care, which places them in either of two broad policy categories:
- Disability income policies
- Medical expense policies
Disability income policies can also be referred to as loss of income, loss of time or replacement income. This type of policy will pay benefits to an insured who is disabled and can no longer work to earn a regular income. Depending on the policy, payments can be weekly or monthly.
With multiple coverage, medical expense policies are characterized by a wide range of coverage from minimal to comprehensive packages. Some include both accidents and illnesses, various hospital expenses and other costs concerning to medical care such as:
- Major medical expense policies
- Comprehensive medical expense policies
- Accident and sickness policies
- Hospital policies
- Basic medical expense policies
Any of these policies might cover different combinations of the above and they may be paid in a lump sum.
Accident Policies. Some policies cover only accidents and not illness. As you might suppose, policies like this are very precise about what is considered an accident.
Since it pertains to the health insurance industry, it is important to understand what is defined as an accident. . .an accident is an event that is unpredicted and unintended.
Remember that any discussion of this type of policy also applicable to any type of policy that includes accidental coverage not just accident specific policies.
Accident benefits are most commonly paid for:
- hospital expenses
- surgical expenses, and
- Medical expenses like visits to the doctor.
- accidental loss of life (also called accidental death)
- accidental loss of limb or sigh (dismemberment)
- loss of time and/or income
Other Resources:
California Broker Magazine - The most highly respected insurance magazine in the state
Canadian Health, Dental, Travel Insurance - Online quotes for group health and individual health insurance. Dental, LTD and critical coverage available. Travel medical insurance for Canada and international.
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