Insurance World

Copyright 2006 Stacey Zimmerman

Health insurance is one of the most important types of insurance available for American consumers. There are a variety of options available when choosing health insurance, however, the main purpose of health insurance is to provide the “insured” with financial coverage that will help pay for the cost of care during thee sickness. Health insurance may also cover things such as hospital beds, lab tests, medicine, surgeries, x-rays, and more. Health Insurance will pay the cost of medical expenses due to sickness, illnesses, accidents, and childbirth. Each health insurance policy is different and it is recommended to determine what types of services will be covered when choosing and comparing health insurance plans. The most common type of Health Insurance is Private Sector Health Insurance. Health Insurance varies from life insurance in a few ways. First, health insurance is purchased annually, and there is no guarantee that premium costs will not rise with each renewal policy.

Before you can qualify for medical insurance, you will more than likely need to undergo a series of routine tests. These tests will screen out any underlying conditions that may require you to need more medical services. Based upon the results of the tests, you may or may not qualify for medical insurance. Unfortunately, many today are facing life without any insurance at all. There are many plans available and many different service providers and brokers that offer a wide variety of health care coverage to qualified individuals. For those who cannot afford to pay the premium cost of health insurance, they may qualify to receive government insurance through their state. The two programs run by the United States government are Medicare and Medicaid. Some local counties may also offer free healthcare to uninsured people through programs that are either federally funded or working on grant monies.

Many people are discovering that they cannot afford the premium price of the healthcare plans that are offered by their place of employment. This does not mean that they have no options available. The first step in determining whether you can afford your company’s health care insurance is to speak with your Human Resource department and see if there is a plan that they offer that meets your needs. You also have the option of researching a number of insurance brokers and agents online. This is a great way to find a free quote and get in touch with different brokers easily. By simply filling out a small questionnaire over the Internet, you will then receive a return phone call by brokers or agents who are interested in signing you to a policy.

Finally, it is important that you choose your health insurance plan carefully. Your plan is a legal binding contract and you have many rights to medical services and covered costs once you enter into this agreement. You should know your rights and understand the terms of your policy plan. Since most people agree that quality health insurance is the most important benefit that companies offer their employees it is necessary that you take the time to read the literature that pertains to your policy plan.

You have taken out a critical illness insurance policy so that if you ever are in the unfortunate situation of developing a life threatening condition, you will be compensated.

But what if you wind up with a critical illness that is not guarded against on the insurance policy? What many people do not realise, and what can be of real concern, is that you may find that after you have purchased critical illness insurance you are only covered for up to 35 listed medical conditions. And this is the deal with most insurance policies. So if you develop a life threatening illness not named in your policy you could be faced with the disastrous situation where you get no pay out from your insurance company at all.

On the other hand, it could be that you have an easily treatable sickness and because it is ranked with what the insurance industry calls a “lower grading”, you end up getting a full payout.

The Financial Services Authority and the Association of British Insurers are wary about whether insurance companies actually make these differences clear.
Jonathan French, a spokesman at the Association of British Insurers, says it is important that customers have an insurance policy fully explained to them before it gets purchased. “The situation we would not want to see occurring is for them to be buying a product thinking that it does something it doesn’t do.”

And for this reason, the ABI recently updated its codes of best practice for critical illness insurance. French says until recently, 35 conditions was the maximum number any company covered for critical illness insurance.

“What we set out are essentially the minimum standards companies have to apply to their policy. The guidance we have published improves the way the critical illnesses are defined. It makes it clear to consumers what levels of illness are covered and what aren’t.”

The cost of critical insurance varies. For someone in their late 30s for a 35-year term with a payout of Ј500,000, premiums cost anything up to Ј600. Scottish Equitable charges premiums of Ј290 and Scottish Provident charges Ј409 premiums for policies based on these conditions. Both these policies are reviewable. A guaranteed policy with Scottish Provident is Ј560.

So these figures give you an idea that the amount of money you pay out for this type of insurance can be expensive. You can imagine how infuriating it could be to find that you have paid out on the policy only to learn that when you do become critically ill your insurer will not pay you out.

There is now, however, a new critical illness product on the market. Prudential is marketing a new ‘Flexible Protection Plan’, which covers up to 140 medical conditions.

In the ‘Flexible Protection Plan’ there are partial payouts depending on the severity of the condition. If the condition worsens, there is more paid out to the maximum sum which has been insured. Most other policies do not offer partial payouts.

Take loss of eye-sight for an example. It would normally be the case with a critical illness policy that you would only receive a pay out if you became completely blind. But the Prudential policy will pay out 25% if you loose sight in just one eye.

But here is the catch. The cost of the policy is almost twice that of conventional illness cover and spectators worry that there will be some confusion about how the severity of an illness would be defined.