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What is a health insurance policy?

A health Insurance policy is basically a contract or a plan that determines the legal structure and coverage of a health insurance. These health policies are designed to provide support for individuals in need of medical care services. Health policies have many characteristic that are not found in other types of contracts. These policies can be acquired in exchange for a certain amount of payment or premiums.

Having a basic understanding of some of the terms within the health insurance policy will be helpful in the process of acquiring a health plan in California. Here are some of the terms and definitions often used in a health insurance policy:

  • Waiting Period: This is the duration of time a person has to wait before the health insurance is available and effective.
  • Grace Period: Grace period is the amount of time given for paying a certain amount or obligation before a deadline is imposed. A penalty will be added to the amount if not settled within the grace period.
  • Pre-existing Conditions: Pre-existing conditions are the medical conditions a person has before applying for a health insurance. Some California health insurance company covers benefits for individuals with pre-existing conditions after a certain period of time.
  • Exclusions: Exclusions are the benefits and services that are not covered by the health insurance plan.
  • Deductibles: Deductibles is a form of payment given to a health care provider before any benefits and services will be rendered by the insurance company.
  • Co-insurance: Co-insurance is an amount of payment issued by an insured individual to settle the remaining balance of the bill after the insurance company exceeded its limits. Co-insurance is also known as co-payments.
  • Out-of-Pocket: This is a form of payment that will come from the persons own pocket.
  • Lifetime Maximum: Lifetime maximum is the highest amount of payment an insurance policy will pay for the insured individual’s entire life.

By knowing some of the basic terms of a health insurance policy it will be easier to decide and choose the kind of health insurance plan perfect for you and your family.

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