Health insurance is the type of insurance in which insurance coverage is provided to an individual in case of disability, long-term treatment or medical care. This type of insurance is provided either by private insurance companies or by social insurance programmes sponsored by government. This type of insurance can be purchased individually or in groups. Premium is calculated as per the estimation of overall possibility of healthcare expenditure according to the financial structure of the organisation. A routine finance structure premiums can be developed monthly or annually so that money is available to meet health care expenditure as per the insurance contract, which is managed by a central organization, such as a government organization, private company, or not-for-profit body.
Before the growth of health insurance, medical charges used to pay by individual insurance. These days, mainly wide-ranging health insurance programs have come up to provide all the expenditure of emergency, routine check up, preventive check up and treatment.
Insurance is an agreement among the individuals or between the sponsor and insurer. The contract can be renewed yearly or monthly. The insured person must know the following contract terms:
Premium: This is the amount, which is paid monthly or yearly by policyholder or sponsor.
Deductible: This is the amount that the policyholder has to pay from his pocket before the insurer pays his share.
Co-payment: This is the amount that the policyholder pays out from his pocket before the insurer pays for the particular visit.
Coinsurance: This is the fix amount that the insured person has to pay for the particular disease.
Exclusions: It is the amount that the policyholder supposes to pay the full expenditure in case of uncovered disease.