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The Starting Point Of Individual Health Insurance

Armen Hareyan's picture

Individual health insurance is the place where one goes when he or she does not have an employer sponsored health insurance. However, where is the starting point of the individual health insurance? While business supported insurance companies garner the efficiencies of scale, providing more benefits with lower premiums simply because of the number of people enrolled, Individual health insurance policies can be an effective way to protect yourself in the case of injury, illness, or disability. Going without medical insurance in these days of increasingly high health care costs can cost you everything you own.

Shopping for an individual health insurance policy can be confusing and more than a little intimidating. By knowing what to look for, what to avoid, and what questions to ask, you can provide yourself with more than adequate coverage, even if you are self-employed, a new employee, or simply seeking more coverage than is provided by your place of employment.

Understanding Individual Health Insurance Terminology

States vary in their requirements and rules, but understanding the basic terms involved with individual health insurance will help you be a more effective insurance shopper and a more discriminating insurance buyer. Your current health status may or may not be grounds for denial of future insurance. This is called "guaranteed issue." "Guaranteed renewability" refers to the insurance company's right, or lack thereof, to cancel your coverage if you become ill in the same way the auto insurance companies cancel coverage for people who have been involved in too many accidents. Ideally, you should try to get a "noncancellable, guaranteed renewable" policy. Second best is a "conditionally renewable" policy that only allows an insurance company to cancel all policies within a specified category, but not yours alone.

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Depending upon your state of residence, health insurance companies can resort to "limits on pre-existing conditions exclusions," which may disallow coverage for medical conditions that were in effect prior to your initial coverage. "Portability" refers to whether or not you get credit for prior coverage or if you must wait until completing the standard exclusion period. You will also want to look for an insurance company that offers a rescission period during which time you can evaluate the policy. Normally, rescission periods are 10 days in length. If at the end of this examination period you decide you do not want the coverage, you can cancel your policy and receive your full premium back.

Individual Health Insurance Information Sources

The Internet is an excellent medium for an individual health insurance shopping and the comparison of insurance companies. Since the laws of each state vary, you will need to become knowledgeable about your state's laws. Georgetown University offers an interactive site (Healthinsuranceinfo.net) with information about each state, the terms, coverage limitations, and premium policies specific to your state. Another online resource is the National Association of Health Underwriters. Their website can help you find the best independent insurance agent in your state for your needs.

One of the best tools for online individual health insurance shopping can be found at eHealthinsurance.com, which allows you to create a side-by-side comparison of a number of independent insurance companies. The most important thing to keep in mind when shopping for medical insurance is to make sure that you understand exactly what is covered, when coverage begins and what is not covered. If there are any aspects of your policy that you do not completely understand, it is up to you to contact your insurance agent and make sure you understand everything.

Christine O'Kelly is a contributor writer for Health Insurance Finders. She conducts in depth research on topics such as Individual health insurance, Student medical insurance, group insurance. Health Insurance Finders is committed to help the consumer find the most appropriate individual health insurance plans that best fit their needs.