What is insurance? Simply put, insurance is a way to manage life risks – those with the real possibility of bodily injury, death, sickness, or incapacity, which could cause unacceptable or unbearable financial hardship. By paying a sum of money to someone else who can afford the risk, usually an insurance company, you then transfer the potential financial burden to that entity. If you have an injury, suffer an illness, or die, the insurance company pays the benefit you agreed upon to those you chose as “beneficiaries”, that is, those who will benefit from the sum of money, or periodic cash payments.

What are the types of Medical Insurance?

  1. Individual Medical plans (under age 65)
  2. Medicare Insurance plans (age 65 +, or disabled)
  3. Group Medical Insurance plans
  4. Supplemental Health Insurance Plans
  5. International Specialty Medical Insurance
  6. Disability income plans

What types of Insurance for Life are available?

  1. Term Life Insurance; a policy that is in effect for a predetermined period of time.  Once the term has expired the policy owner my have the option to renew at a much higher premium.
  2. “Permanent” Life Insurance; a policy which is designed to cover a person until death.
    1. Whole Life
    2. Universal Life (including Indexed Universal Life, Guaranteed Universal Life – like term life)
    3. Variable Life

How do Deductibles and Coinsurance and Copays Work?

Health insurance plans involve three important features: deductibles, coinsurance, and copays. Knowing how these work can help you better understand how health insurance works. It can also help you compare health insurance plans and determine which is the most affordable health insurance plan for your situation.

How Deductibles Work
Your deductible is the annual amount you pay for certain covered health care services before your health insurance plan pays for all or part of certain covered services. You pay the full amount of your health care costs until you reach your deductible, except for plans with copays (see below).

Once you’ve reached your deductible, the insurance company shares your health care costs with you. This is known as coinsurance.

How Coinsurance Works
Once you reach your deductible, the insurance company pays a percentage of the cost of your health care and you pay the rest. The amount you pay can range from 0% to 50% of the total cost, depending on the plan you choose.

However, coinsurance has a maximum. Once that coinsurance maximum is met, the insurance company pays 100% of your covered health care costs for the rest of the year. (Some exceptions may apply so check your policy!)

How Copays Work
Many plans require you to pay a copay (copayment) each time you go to the doctor, fill a prescription, or visit the Emergency Room. Copays do not accumulate and count toward your deductible, but may count toward the maximum you have to pay in a year.