Understanding Health Insurance Terminology:

It is very easy to get lost in the myriad of terms that are involved with health insurance. However, if you take the time to understand what these terms means, you will be able to make a well-informed decision on your health care options and make selecting your new health insurance policy much easier.

Here are the most common terms that you will come across in your quest for health insurance.

Premiums - this is the monthly or yearly fee for your health insurance coverage. This amount will not include your deductible, co-insurance or any co-payments that your insurance company many require.

Deductible - a deductible is the set amount after which your health insurance company will provide coverage. For example, if your deductible is $500, you would need to pay $500 out of your own pocket for your health care needs. Once you have paid up to this point, your health insurance coverage will take effect.

Co-Pay - a co-pay is an amount that your insurance company may ask you to provide for certain health procedures, doctor visits or prescriptions. Co-pays typically range from $20 to $50, depending on your insurance policy.

Co-Insurance - a co-insurance plan will ask you to provide a set amount of payments for specific procedures. For example, your insurance company may provide 80% coverage for a doctor's visit, leaving you to pay the remaining 20%.

Out-of-Pocket - this refers to the money that you, the policy holder, will need to provide from your own pocket for specific medical procedures, doctor visits, prescriptions or other charges under your health plan.

Exclusions - this term refers to what your insurance policy will not cover. This can range from cosmetic procedures to specific pre-existing condition treatments.

Pre-existing Condition - a pre-existing condition is a condition that you are currently suffering from before purchasing a health plan. Typically, an insurance plan will not provide coverage for a pre-existing condition, or may require higher premiums for coverage.

Lifetime Maximum - this amount refers to the maximum amount that your insurance company will pay for your health care needs for the life of the policy. This amount is very important to consider when purchasing a health plan.

Waiting Period - this is the length of time between your initial application and the start date for your coverage. Many companies will require a 30-day waiting period, but in some cases, this time period may be longer.

Coordination of Benefits - if you have more than one health plan, you will need to decide which one will be primary, secondary and in some cases, tertiary. It is a good idea to use your most comprehensive insurance plan as your primary insurance provider.

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