Health Insurance

Why Do I Need Health Insurance?

  • The main reason why health insurance is important is it helps you get the care you need — even if it’s basic preventive care — at a price you can afford.

  • Health insurance helps pay the costs for medical care that you or covered dependents receive. Without it, you may pay the full cost for all your care.

  • Many health plans provide you with a network of participating doctors, specialists, other health care practitioners, and facilities to choose from. These network doctors, hospitals, and others offer lower rates than those outside the health plan’s network, which helps keep your costs lower.

  • Having a health plan encourages you to see your doctor for your annual check-up and other preventive care. This helps identify any health issues early before they become serious. And most health plans provide 100% coverage for certain in-network preventive care.

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What kinds of health insurance are there?

There are essentially two kinds of health insurance: Fee-for-Service and Managed Care. Although these plans differ, they both cover an array of medical, surgical and hospital expenses. Most cover prescription drugs and some also offer dental coverage.

  1. Fee-for-Service: These plans generally assume that the medical professional will be paid a fee for each service provided to the patient. Patients are seen by a doctor of their choice and the claim is filed by either the medical provider or the patient.

  2. Managed Care: More than half of all Americans have some kind of managed-care plan1. Various plans work differently and can include: health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point-of-service (POS) plans. These plans provide comprehensive health services to their members and offer financial incentives to patients who use the providers in the plan.

Understanding disability insurance

  • There are two types of disability policies: Short-Term Disability (STD) and Long-Term Disability (LTD):

    Short-Term Disability policies have a waiting period of 0 to 14 days with a maximum benefit period of no longer than 2 years.

    Long-Term Disability policies have a waiting period of several weeks to several months with a maximum benefit period ranging from a few years to the rest of your life.

  • Disability policies have two different protection features that are important to understand.

    Non-cancelable means the policy cannot be canceled by the insurance company, except for nonpayment of premiums. This gives you the right to renew the policy every year without an increase in the premium or a reduction in benefits.

    Guaranteed renewable gives you the right to renew the policy with the same benefits and not have the policy canceled by the company. However, your insurer has the right to increase your premiums as long as it does so for all other policyholders in the same rating class as you.

  • In addition to the traditional disability policies, there are several options you should consider when purchasing a policy:

    Additional purchase options
    Your insurance company gives you the right to buy additional insurance at a later time for an additional cost.

    Coordination of benefits
    The amount of benefits you receive from your insurance company is dependent on other benefits you receive because of your disability. Your policy specifies a target amount you will receive from all the policies combined, so this policy will make up the difference not paid by other policies.

    Cost of living adjustment (COLA)
    The COLA increases your disability benefits over time based on the increased cost of living measured by the Consumer Price Index. You will pay a higher premium if you select the COLA.

    Residual or partial disability rider
    This provision allows you to return to work part-time, collect part of your salary and receive a partial disability payment if you are still partially disabled.

    Return of premium
    This provision requires the insurance company to refund part of your premium if no claims are made for a specific period of time declared in the policy.

    Waiver of premium provision
    This clause means that you do not have to pay premiums on the policy after you’re disabled for 90 days.