The primary reason for buying health insurance is similar to purchasing any other insurance policies; to protect yourself financially. With health insurance, you’re able to protect you and your family members in case you need costly medical treatment. Therefore, you should have adequate insurance that best meet your needs and your financial circumstances.

Basic types of health insurance

All the health insurance plans can be divided into 2 major categories, which are discussed in the following lines.

1. Managed care plan – Managed care plan usually helps you to minimize the costs of medical treatment. These plans usually have managed care program that helps to control medical treatment costs. Usually, the insurance companies have contract with various doctors and hospitals to provide you with cost-effective medical care.
2. Indemnity plan – You can choose your own doctor if you buy indemnity health plan. It provides coverage for hospitalization, outpatient care along with covering physician services both inside and outside the hospital. This plan is also referred to as fee-for-service plan.

How to purchase health insurance

There are 2 major ways to obtain health insurance coverage – having a group health insurance plan or purchasing individual health insurance policies. Each of the types is discussed below.

1. Group health insurance plan: Usually, you get group health insurance through your jobs; sometimes, you also get coverage if any of your family members have group insurance plans at work. It is usually the least expensive health insurance policy, as the employer pays either part or the whole premium amount that is required for the coverage.
2. Individual health insurance policy: You can purchase individual health insurance if your employer does not offer group health insurance. It is also needed if your group insurance does not cover the costs of medical treatment, which you may require in future. You can purchase individual policies either from insurance companies or from insurance agents, who sell policies.

Factors to consider while buying health insurance

You should consider the following factors while shopping for individual health insurance policies.

• Compare insurance policies: There are wide differences between individual health insurance policies. Therefore, it is advisable that you compare different insurance policies before you buy one.
• Conditions of coverage: Before buying a policy, enquire what factors are included or excluded from the insurance coverage. Enquire whether or not there is a waiting period for claiming the insurance coverage.
• Understand the policy clearly: Make sure that your policy will give right amount of coverage in need. Therefore, go through the terms and conditions of a particular policy before purchasing it.
• Single disease insurance: Beware of policies that provide protection for a single disease. In most cases, your regular insurance provides adequate coverage as per your specific need. Therefore, before buying further policies, check whether or not your new policy is offering any extra protection.

Apart from considering the above factors, you should also check whether or not your health insurance policy is having a ‘Free look’ clause. Usually, insurance companies give some time to the policyholder to go through the policy clearly. If you’re not satisfied with the terms and conditions of the policy, then you can return it and in turn, the company refunds you the money.