Investing in Individual Health Insurance Tips

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Check The Dates

What is the exact date that the policy will effectively begin coverage? Most have a waiting period before coverage begins, aside from pre-existing conditions. You do not want to start accumulating medical bills before you policy starts, because you will be responsible for them. Delay some of your appointments until you are certain that all the paperwork in completed and you are covered. Some transitions are not smooth, paperwork is lost, and the wrong information is transferred. In order to avoid confusion, be sure you get the actual start and ending dates in writing and mark them on a calendar


The Noncancellable And The Conditionally Renewable Policy

Most individual policies are non-cancelable, “guaranteed renewable”. This means that you will receive individual insurance under that policy as long as you keep paying the monthly premium; however, the insurance company may raise the cost. More than likely, the price of your policy will increase year after year unless determined otherwise. If this is true, there may be a “durational rating” which is included on your policy. This usually discourages people from renewing their policy because of the yearly increase of premiums that most insurance companies impose.
On the other hand, the “conditionally renewable policy” means that the insurance company can cancel all policies like yours, not just yours. This protects you from being singled out. But it doesn't protect you from losing coverage.
Be sure you read the fine lines in the policy that clarify the percentage you insurance costs may increase as well as the state that the policy is in that governs those rules.

What do I do now that I've lost my group health insurance coverage?

Replacing Group Coverage with Individual Health Insurance

If you recently have become ineligible for health insurance coverage under a group policy there are a couple of options. If you were insured under your employer's group policy and the business had 20 or more employees, federal COBRA laws qualify to continue your insurance under that plan. COBRA stands for Consolidated Omnibus Budget Reconciliation Act. Employers with more than 20 employees are required to allow continuation of coverage to employees and their dependents who leave their jobs. You will, however, be responsible to pay the entire monthly premium. You can continue your COBRA coverage for up to 18 months, and surviving dependents can receive coverage for even longer. If you had group coverage through a professional association or group and are no longer eligible for that coverage, you can purchase an individual insurance policy to cover yourself and your family. An insurance agent may represent a range of different insurance companies and will be able to provide you with an individual health insurance quote from a range of different companies. If you deal directly with a specific insurance company, it should be able to quote you on different products with different deductibles and coverage features. For a list of insurance companies approved to provide coverage in your state, visit your state insurance commission's Web site or call the office directly.

What is a "free look" clause?

The Free Look Clause

The "free look clause" in an insurance policy is a consumer protection clause. It states that the consumer has a certain number of days, usually ten, to review the terms of a health insurance policy once receiving it. If you decide the policy does not suit you, or if you feel the terms as stated in the policy contradict what you discussed with the agent or insurance company, you can return and cancel the policy and receive a full refund of any premiums paid. Make sure you adhere to the terms of the free look clause to avoid any hassles. It is suggested you remember that not all policies offer a free look clause, so when you are shopping for policies make sure to ask about this.

What is a waiting period?

Waiting Periods

Whether you are investing in individual health insurance or have group health insurance, chances are you will be subjected to a waiting period. During a waiting period, which can range from a few weeks to usually no more than six months, your insurance plan will not pay benefits. This is a device used by insurers to limit their liability or risk. The idea is that new enrollees in a health insurance plan may have "roll-over" illnesses or pre-existing conditions the services for which the insurer does not want to pay. When shopping for or switching to a new health insurance plan, make sure you understand all restrictions regarding waiting periods, pre-existing conditions, and how they will affect you from both a financial and health care standpoint.

What is a single disease insurance plan?

Single Disease Insurance Plans

A single disease health insurance plan is just as it sounds. It is a plan that is designed to only cover one disease. This type of insurance plan is available to cover a range of extremely serious illnesses such as cancer and multiple sclerosis. Make sure when you are gathering your individual health insurance quotes that you are not being quoted prices on single disease insurance plans, unless that is what you are specifically seeking. These plans will not cover routine or emergency health care costs, other than for the single illness defined in the policy.

What is individual health insurance?

Individual Health Insurance

The phrase individual health insurance, also called personal health insurance, can be misleading. Individual health plans can cover a single person, a couple, or an entire family. Investing in individual health insurance does not mean that only you can be covered. The term "individual" refers to the fact that the coverage is being purchased by an individual directly from an agent or insurer rather than through an employer's or professional association's group contract. Many people who buy individual health insurance, work for themselves as freelance contractors or own a small business, and are seeking to provide coverage for their family and a few employees. Individual health insurance is usually more expensive than purchasing through a group and generally covers a more narrow range of goods and services.

Groups have the leverage to negotiate lower premiums and tailored coverage for their members because the insurer is guaranteed an inflow of new premiums. Before you consider an individual health insurance, check whether you qualify for coverage through a small business association or union to which you belong. However, if you do not belong to any such groups, it may be worthy to join one in order to gain access to the group' insurance benefits.

Should I purchase additional health insurance?

Considering Additional Insurance

If you are already covered by your own insurance or the insurance of your partner parents, chances are you already have all the coverage you need. Given the staggering premiums you would likely pay for additional health insurance coverage, you would be better off contributing to a flexible spending account (FSA) or if you do not have that option available to you, into a regular savings account. Larger employers offer FSAs. When you sign up, you will specify how much you wish to contribute over the course of the year. Your employer then deducts the full amount in equal installments based on how often you are paid. If you get paid once a month, one-twelfth of the total contribution is deducted from each paycheck. You need to save your receipts and submit them to the account administrator (not your employer), and you will receive a check for that amount back. The great thing about FSAs is that the total amount you intend to contribute is available to you as of January 1 of the calendar year, even though you will not have deposited the full amount until your final paycheck. The disadvantage of FSAs, is if you overestimate your out-of-pocket expenses and do not use the full amount you contribute, you will lose it. For more information on FSAs, visit the IRS's Web site.

What is a noncancellable policy?

Non-cancellable Policies

A non-cancellable health insurance policy, also called a guaranteed renewable policy, is a policy that cannot be cancelled as long as you pay your premiums on time. A non-cancellable health insurance policy does not however, guarantee your premiums will not rise over time. Numerous companies are offering what are called conditionally renewable policies. Conditionally renewable policies allow the company to cancel all policies of the same type as yours. This prevents an individual from being singled out by a company based on usage patterns. However, it does not prevent your coverage from being cancelled in the event the company decides to cancel all such contracts it has. This usually happens if the amount for covering a particular group of people becomes financially undesirable for the company.

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Barbara Gibson