Define Individual Insurance Policy

Almost everyone requires medical help at some point in their lives. If you don't have access to other types of insurance, individual insurance may be the answer. Though individual insurance generally costs more than other plans, having no insurance can run you the risk of paying more for medical bills. If you are looking for an individual health insurance plan that's affordable and provides sufficient coverage, getting accepted can be challenging.

Definition

• Individual health insurance is defined as health coverage that is purchased at an individual basis and not as a part of a group. Individual health insurance generally has a higher premium, compared to a group policy.

Function

• People who purchase individual insurance policies typically do so because they do not have access to employer-provided group health coverage. These people also may not qualify for public programs such as Medicaid or Medicare. Other reasons for buying individual health insurance is if the person is self-employed, works for a small company that doesn't offer insurance or retires before medicare can kick in.

Type

• Different types of individual health insurance exist: fee-for-service insurance, managed care plans, open enrollment in managed care plans, association-based health-insurance and high-risk pools.

Consideration

• A good health insurance plan includes elements that can prevent financial hardship, such as a high coverage limit; annual dollar limit so that the individual can live with an out-of-pocket maximum; no dollar limits on expenses, such as daily room charges or types of surgical procedures; and the freedom to see specialists without needing a referral and worldwide coverage.

Warning

• Individual insurance has a reputation for being difficult. Individual insurance is more costly than employee-based coverage.

  In addition, some laws and regulations accept medical underwriting, a practice that allows insurers to reject people with illnesses, exclude certain conditions from coverage, and charge those with health problems higher premiums. In some states, medical underwriting is illegal, so it is important to review state laws and regulations when hunting for individual insurance.

  Those who have less-than-perfect health can find that individual health insurance is either unaffordable or unavailable. Such difficulties with individual insurance can leave those who get sick with massive medical debt.

  Be aware that insurance coverage can have loopholes in areas, such as prescription drugs, mental health and dental care.