August 27, 2010, Newsletter Issue #245: Individual Health Insurance

Tip of the Week

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.

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