Understanding Your Health Insurance Policy:
Health insurance can be very confusing, particularly if you have never had an insurance policy before. When you purchase your policy, it is helpful to understand how it will work for you and what the different terms actually mean.
We'll start with the three different types of health insurance plans.
HMO - Health Maintenance Organization. HMO plans are typically much more affordable than PPO plans, but they do have some limitations. For example, you will be limited to plan physicians for your regular care needs, and not all procedures will be covered. In the event that you have need of a specialist, your primary care physician will need to furnish you with a referral for your coverage to take effect. HMO's typically have a lower monthly payment and low deductibles. However, you may be required to furnish a co-pay for doctor visits or for your prescriptions.
PPO - Preferred Provider Organization. This type of insurance allows you greater freedom to select your own physician and will commonly provide you with a greater amount of health coverage. A PPO plan will have a higher monthly fee, and a higher deductible. However, most PPO plans do not require a co-pay or co-insurance. If you have need of greater flexibility, this type of plan will be more suited to your needs.
POS - Point of Service. This is a mix-and-match between an HMO and a PPO plan. You will normally be able to select your own physician, and your monthly payments and deductibles will be lower. If you are seeking a health plan that offers more flexibility, but you are not in a position to go with a PPO plan, a POS plan may be just what you are looking for.
Now that you understand the three main types of health insurance available to you, there are other types of health insurance policies which may be beneficial.
Accidental Death and Dismemberment - If you are worried about being incapacitated in an accident, or if you are concerned about your family's welfare if you are killed, an Accidental Death and Dismemberment policy can assist you. This type of policy will pay out in the event that you suffer dismemberment, or if you are killed in an accident. These plans are typically quite strict in their limitations and it is important to thoroughly understand the conditions before purchasing your plan.
Disability Insurance - Disability insurance can be used to replace your income should you become completely disabled or unable to work due to a sickness. This type of insurance is very useful if you are the sole income provider for your family.
Long Term Care Insurance - Long-term care is expensive and typically not covered by many health policies. This additional insurance will help you with your long-term care costs, such as nursing homes, live-in care or other long term needs. While Medicare does provide some coverage for long-term care, it is limited. If you want to make sure that your needs are met as you age, this type of policy can give you great peace of mind.