Medical Insurance

Health insurance, alternatively referred to as, medical insurance or simply medical claim, is a type of insurance coverage that covers the cost of an individual's medical and surgical expenses. The individual, also known as the insured, pays a fixed sum (premium), every year for the health cover. The cost of health insurance premiums is deductible to the payer, and benefits received are tax-free. In case of a medical problem that necessitates surgery/hospitalization, the insured is reimbursed by the health insurance company either directly in cash or indirectly through payment to the hospital/clinic.

Taking health insurance is one of those things an individual cannot ignore given the rising costs of treating health problems. Inflation in Medicare or medical treatment is a lot higher than general inflation or inflation in other categories like food and clothing. While inflation in most categories is in single digits, inflation in Medicare is often higher. Arranging large sums of money at the last moment to treat medical emergencies is difficult if not impossible for most individuals. Hence being prepared is the only way out.

One way to plan for medical emergencies better is by opting for health insurance plans. Health insurance offers considerable leeway in terms of disease coverage. Certain health insurance plans cover as many as 30 critical illnesses and more than 80 surgical procedures. The health insurance plan disburses payment towards treatment regardless of actual expenses. The policy continues even after the benefit payment on selected illnesses. Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider directly. It is often included in employer benefit packages as a means of enticing quality employees.

Health insurance policy is a contract between an insurance provider (e.g. an insurance company or a government) and an individual or his/her sponsor (e.g. an employer or a community organization). The contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans. The type and amount of health care costs that will be covered by the health insurance provider are specified in writing, in a member contractor "Evidence of Coverage" booklet for private insurance, or in a national health policy for public insurance.