Health Insurance: Types of Health Insurance Plans.
Health insurance is any type of insurance policy that covers the cost of medical expenses suffered by an individual or members of their family.
In recent years, the cost of healthcare services has been on the rise and this has made life harder for individuals.
However, having health insurance gives you financial coverage against unprecedented medical expenses.
There are several types of health insurance plans available and each is unique with their special benefits. One of which is disability insurance.
Disability insurance is a type of insurance policy that provides financial protection to a person in case they are unable to work due to a disability.
This type of insurance is very important because it can help you keep up with your daily expenses when an individual is unable to work due to an illness or injury.
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Types of Health Insurance Plans.
1. Fee-for-service plans:
This is the most common type of Health insurance plan, Fee-for-service plans are also called indemnity plans.
In this type of plan, you pay monthly and the insurance company helps you pay a portion of all the medical expenses incurred by the policyholder.
The policyholder is free to choose any medical centre of their choice and also has the power to choose the medical service they desire.
However, the policyholder is mandated to pay a deductible which is an allocated amount that must be paid out of their pockets monthly before the insurance company can take care of any of their medical bills.
Additionally, the policyholder may be required to pay co-insurance, which is a percentage of the medical expenses they must pay out of pocket after the deductible has been met.
2. Health Maintenance Organization (HMO) plans:
Health Maintenance Organisation plans are a type of plan which are managed.
In this special type of plan, the policyholder makes payment of a monthly fee to a primary care physician (PCP) from a network of providers.
In this type of plan, the primary care physician takes care of all the individual’s medical needs and the individual needs a referral from the PCP to see a specialist.
HMO plans typically cost less than fee-for-service plans but the policyholder is not free to choose his healthcare providers and treatments.
3. Short-term disability insurance:
Short-term disability insurance is a type of insurance that gives you income replacement for a short peri, typically up to six months.
This type of insurance policy provides coverage for a wide range of injuries and conditions, including pregnancy and childbirth.
Short-term disability insurance policies usually have a waiting time of a few days or a few weeks before an individual starts to receive benefits.
However, the waiting period is shorter than the other types of insurance policies and the premiums are much lower.
4. Preferred Provider Organization (PPO) plans:
These types of plans are also a type of managed care package.
In the PPO plan, the individual is required to pay a monthly fee and can choose medical professionals from a list of available professionals.
The policyholder can also decide to visit healthcare providers outside the network, but this would cost more money out of their pocket.
PPO packages generally have much higher flexibility as you can choose whichever treatment and medical care provider you want.
5. Long-term disability insurance:
Long-term disability insurance helps you with medical bills for a longer peri. This ranges from several years until your retirement age.
This type of insurance policy also provides coverage for a wide range of injuries and illnesses but unlike short-term disability insurance, it includes chronic diseases.
Long-term disability insurance plans have a waiting period of several weeks to several months before the benefits can start coming in.
The waiting period for the benefits is typically longer than that of the short-term disability insurance plan. The premiums are also higher.
6. Own-occupation disability insurance:
Own-occupation disability insurance provides coverage if the policyholder is unable to work in their specific occupation due to an illness or injury.
This type of policy provides the most comprehensive coverage and is ideal for individuals in professions that require specific skills and knowledge, such as doctors, lawyers, and engineers.
Own-occupation disability insurance policies typically have higher premiums than other types of disability insurance policies.
7. Point of Service (POS) plans:
POS plans are a combination of HMO and PPO plans.
In this type of plan, the policyholder pays a yearly decoration and chooses a health care provider from a network of providers.
The PCP coordinates all the policyholder’s medical care, but the policyholder can choose to see healthcare providers outside the network if they’re willing to pay advanced out-of-fund costs.
8. Social Security Disability Insurance:
Social Security Disability Insurance( SSDI) is a civil program that provides income relief to individuals who are unfit to work due to a disability.
To qualify for SSDI, the individual must have a condition that’s expected to last for at least 12 months or lead to death.
The said condition must also stop the person from engaging in any substantial economic exertion.
SSDI benefits are grounded on the existent’s continuance average earnings.
9. High Deductible Health Plans (HDHP):
HDHP plans are becoming increasingly popular in recent years.
In this type of plan, the policyholder pays a lower monthly premium than other plans but has a higher deductible.
The policyholder must pay the full deductible out of pocket before the insurance company starts paying for medical expenses.
HDHP plans are often paired with a health savings account (HSA), which allows the policyholder to save money tax-free for medical expenses.
HDHP plans are a good option for healthy individuals who do not require frequent medical care.
10. Own-occupation disability insurance:
Own-occupation disability insurance provides coverage if the policyholder is unable to work in their specific occupation due to an illness or injury.
This type of policy provides the most comprehensive coverage and is ideal for individuals in professions that require specific skills and knowledge, such as doctors, lawyers, and engineers.
Own-occupation disability insurance policies typically have higher premiums than other types of disability insurance policies.
Conclusion:
In conclusion, Health and disability insurance is very important to safeguard a person’s financial stability if they suffer a terrible illness or injury that stops them from working.
Choosing the correct health insurance package is a very important decision and it requires very thorough thinking.
Every health insurance package contains special benefits and features that meet the needs of all individuals so it is best you choose a plan that falls in line with your needs and budget.
It is also essential to understand the terms and conditions of the policy, including the deductible, co-insurance, and out-of-pocket payments.
