Getting acquainted with health insurance terms
Many people who opt for health insurance are blissfully unaware of the terminologies related to the industry. However, a little knowledge about the common terms used in the arena of insurances could be helpful in the process of selection of the right plan that would give them maximum benefit.
Perhaps the most common terminology used in relation with insurance plans is the word “premium”. The term premium refers to the amount that is paid by the policy holder to the insurance company every month to buy the health coverage.
Another very commonly used term is “deductible” that refers to the amount that the policy holder is supposed to pay from his pocket before the insurance company pays its share. For example if someone is covered by the Individual health insurance plan then he may have to pay $400 form his pocket first before he becomes eligible to get insurance coverage under the plan.
Co-payment refers to the term under which the policy holder should pay $45 out of his pocket for the visit by the treating physician or the pharmacist bills before the insurance company pays its own share. On the other hand Coinsurance means that the policy holder must pay a part of the expenses and the balance would be covered under the health insurance plans.
Some of the services may not be covered at all under the insurance plan and they are called the exclusions. On the other hand coverage limit refers to the maximum percentage of expense coverage offered by the insurance company.