The Basics of Insurance

In the United States, insurance is something that many people struggle to get their heads around. From the jargons to the plans, it can be a difficult and discouraging thing to understand.

So, here are some terms that you should understand.

Terms and Definitions

Claim

an insurance claim is sort of like a plea you make to your insurance company to pay for an incident, injury, or overall general care.

Co-Insurance

co-insurance is the percentage of costs of a service that is paid by you and your insurance company.

For example, in a 70/30 coinsurance plan, you will pay 30 percent of the costs, and your insurance will pay the remaining.

Co-Pay

a copay is a fixed rate that you pay at the time of the service.

Say it’s time for your annual dental cleaning. You and your insurance plan agreed that you will pay $20 down for your visit.

At the appointment, all you will pay is $20.

Deductible

a deductible is the amount of money you owe before your insurance starts covering the majority of your costs.

For example, you have a low deductible of $1500 and you plan on having a procedure later into the year.

You will have to pay the initial $1500 of the covered service before your insurance helps you with the rest.

Explaination of Benefits(EOB)

an explanation of benefits document typically comes after your claim has been processed and details how each service was covered.

In-Network

when a provider is in-network, that means they have a contract with your insurance plan in which they can provide services that your insurance can cover at a discounted rate.

Premium

a premium is the amount of money you pay per month for your insurance policy. Basically, a monthly payment.

Provider

a provider is an individual or an entity that is authorized or licensed to provide healthcare services.

Of course, there are many terms associated with insurance, however, it’s best to not overwhelm you with so much insurance information, so, let’s just leave it at that.

Types of Insurance

Car Insurance

Car insurance, also known as auto insurance, is financial protection on your car provided by an insurance company. Some auto insurance companies are Progressive, Allstate or Geico. More likely than not, if you have a car, you are required to have car insurance.

Compare quotes and policies from different agencies and pick the best one for you. Some of the things car insurance covers include collision, personal injury, liability, etc.

It is important to know that auto insurance does not cover everything. Some companies will not take responsibility for any personal property that is stolen from within your car. Be mindful and alert, invest in a dashcam, and get insured.

If you are a student, auto insurance agencies sometimes have special offers. For example, an insurance agency can give you a discount based on your GPA. Call your insurance company and ask what they have available.

Health Insurance

Health Insurance is a bit more complicated but very important. Anything can happen. A bug bite can make you paralyzed, a stint with the flu can alter your entire immune system. The fact is, our health can change drastically and randomly, so it’s best to be insured. Read this story about a woman whose entire life changed from something that was out of her control.

With health insurance, you can get preventative care, including vaccines and checkups, and pay significantly less money than someone who is not insured. Some health insurance companies are Blue Cross Blue Shield, United Health Group, or Medica.

If you cannot afford private health insurance, there are government insurance programs that can help you get your bills covered. Medicare or Medicaid are examples of this. To pick a health insurance company, look into clinics or hospitals near you, pick a provider, and select a plan that suits your health needs.

Most insurance companies have online tools that narrow down your search so you can pick the exact plan that is right for you.

Dental Insurance

Like the above-mentioned insurance types, dental insurance operates pretty much the same way, but for your teeth and mouth.

Dental insurance companies typically cover preventative, basic and major care. According to Humana most plans cover 100/80/50, meaning your preventative care is fully covered, basic care is 80% covered, and any major care services are 50% covered.

For dental insurance, preventative care is the typical oral cleaning that occurs every 6 months or a annual checkup. Because dental care typically has a negative connotation to it, given people’s fear of dentists, it is absolutely necessary. Never underestimate how important oral care is, toothaches are not a laughing matter.

Conclusion

There are more things about insurance that you can learn about. The things listed above are just the basics.

If you ever get stuck in a situation that you do not understand regarding your health, auto, or dental insurance, make sure you contact a customer service representative at the companies you are insured with. They are there to help you with your claims and other services.

Written by Doreen Chirwa · My Growing Pains