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Understanding Health Insurance Terms

If you think insurance has a language all its own, in some ways you’re right! Especially when it comes to health and medical insurance, wise decisions are better made when you know and understand the lingo.

Once you’ve got some basic terms down pat, comparing and analyzing plans, costs and benefits will prove a much easier task!

A Guide to the Basics

If you’ve ever purchased insurance, whether for a car, home or family member, you probably recognize the words “premium” and “deductible.” Let’s take a look at what these mean specifically regarding health insurance.

Every health care plan employs a basic premium. Your premium is the amount you pay for your health insurance policy, whether monthly or yearly.

If you get medical care through an employer, you won’t have to pay your entire premium. Your employer will supplement it—or may even cover it completely. This makes price of much less concern when shopping for the right insurance plan.

But your premium is only one cost you’ll encounter when shopping for health insurance. When you actually seek medical care, you’ll also need to pay a deductible, co-pay or both. A deductible is the amount you’re responsible for before your insurance kicks in and starts paying on your behalf. It’s a set amount established quarterly or yearly, depending on your insurer.

A co-pay is a portion of your medical bills not covered by your insurance company…which means they’re your responsibility. Your co-pay, or coinsurance as it’s sometimes called, may be as little as five percent or as much as 20 percent of your total medical bill, as designated by your policy.

But there’s also a stipulation called out-of-pocket maximum. This means that if you wind up reaching a pre-established limit when paying your own health care expenses, your insurer will take over and relieve you of any further financial burden—for a year or even longer.

When examining health care plans, pay close attention to these and other details. Keep an eye on the fine print and define each policy’s exclusions, or benefits not covered.

No plan covers everything, so make sure you know ahead of time which benefits you and your family really need and get them included in your policy.

Talking the Talk

There you have it—your basic health insurance jargon. Since these terms are common denominators in all insurance plans, you should now be able to “talk the talk” when shopping for health insurance.

You’ve got the facts behind all that jargon; now get ready to go shopping! Request your free quotes, compare plans, and make the right decision for you and your health today.

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