What’s in an Insurance Policy?

LENOIR, NC (April 18, 2018 by Laura Sedlacek)…Insurance is a complicated subject, product, whatever you want to call it, to say the very least.  Even with all the improvements, modifications, etc it’s still very difficult for people to understand their products and/or their policies.   If you look at a standard insurance policy, they contain pages of definitions!

Of course, most people don’t read illustrations, brochures, much less their polices!  Why is it important to read the insurance literature you receive?  Because insurance is an intangible product, you need to know what it covers, how it will cover, and of course what it won’t cover!

You can get the advice, and you should, of a licensed insurance expert because we have the experience and education to explain the products to you in a way you understand.  Even in doing that, though, you have to be careful who you are talking to about your insurance products.  You want to make sure you deal with an agency with a good reputation where they explain all aspects of the product to you and don’t just tell you what you want to hear.  For instance, if you have someone telling you that you can get a policy for zero premium and only have very little to pay if you go to the hospital or nothing at all then you can bet they are leaving something out.  The old adage if it sounds too good to be true applies even with insurance.    

It’s important to do your research and to carefully examine what products work right for you.  In my business, I make it a practice to compare products (when applicable) for folks so they can make an informed choice that’s within their budget.

Here are some laymen explanations for individual policies you are likely to come across.  (Please note that these are general explanations and should not be taken as legal definitions for how your particular policy works and/or what it covers):

Individual Health aka Major Medical: an insurance policy for individuals and/or families where hospital, doctor, prescriptions are covered generally with no cap once applicable deductibles, out of pockets and copays are met.  Covered services are based on the network, type of covered service, and where your deductible, copay (if applicable), out of pocket limit apply.  This is the broadest insurance coverage you can buy as an Individual.  These plans most always fall under the ACA these days.

Hospital Indemnity:  This type of policy is limited as to what it pays.  Usually you get a lump sum for so many hospital stays, doctor visits, etc.  It will only give you a certain amount, usually only a few thousand dollars for the hospital and around fifty dollars for a doctor visit, towards your medical costs.  This is not a plan subject to the ACA and it technically does not satisfy the ACA insurance mandate as it is not major medical coverage.  It is often masqueraded as major medical.  It is, however, a supplemental product or something you could pair with other plans if you cannot afford an ACA plan or just don’t want one.

Short-term Health:  Is exactly what it says it is.  A major medical plan for a short term.  Because of ACA, currently the maximum length for this type of policy is up to 90 days.  There is legislation being worked on to extend it up to 12 months.  The policy is good for the life of the policy.  It also requires underwriting which ACA plans do not have anymore.  It will not cover pre-existing conditions.  If you develop a severe health condition while on one then you most likely won’t be able to take out another one with the same company later.  Plus even if you take out a new short-term your current health issues would not be covered on the newest plan.  Short-terms are really designed for interim coverage situations such as:  changing jobs, graduating from college, graduating from high school, moving, change in life circumstances like getting married and waiting to go on a spouse’s plan, etc. 

Accident Plans:  These plans give you extra dollars for accidents depending on how accidents are covered in your policy.  These are relatively inexpensive and give you some extra coverage in the event of an accident.  Not to be confused with Accidental Death usually connected with Life insurance plans.

Cancer Plans:  Gives you extra dollars at first diagnosis, extra money for medications, hospital stays, respite care, travel, etc.  Very affordable and they give you some additional coverage to go along with a Medicare type plan or Health plan giving you peace of mind.

Critical Illness:  Gives you lump sums usually for a dread disease diagnosis.  Can add Cancer coverage as an option.  Sometimes these plans give you dollars for getting a preventive care check up.

Long Term Care:  Long Term Care insurance generally helps to pay for your care in an Assisted Living facility, Nursing Home or provides for Home Health Care.  This is for care that lasts longer than a temporary stay as you can get plans that cover your needs for 2 years plus.  The younger you are when you buy this type of plan, usually the better the rates.  You can be of any age and have something happen which requires this type of care.

Short Term Recovery:  Also a type of long term care except this plan usually only covers a Nursing Home and lasts up to almost a year. 

Disability:  Covers you if you get hurt or disabled or even sick from an Accident or Illness.  This type of plan helps replace a portion of your income if you can’t work.

Medicare Supplement aka Medicare Gap: Supplements what Original Medicare doesn’t cover for Hospital and Doctor services.  While the premium is generally higher on this type of plan, if Medicare covers a service you usually have nothing else to pay.  Plus you only have to go to a provider that accepts Medicare – there are no networks.

These are just some types of individual insurance plans you can purchase.  Again, assess your needs to decide what works best for you.  Remember that insurance agents are required to complete hours of continuing education and also training for the products they sell so they can advise you.  It doesn’t generally cost you anything extra to work with an Agent as premiums are the same whether you try to handle it yourself and buy direct or if you work through a local insurance agency.

For more information, please contact Laura at Bush and Associates on Facebook @bushassociates, Instagram @bushandassociates, email  quotes@bushandassociates.net, visit 916 Wilkesboro Blvd in Lenoir, or call (828) 754-2601.  www.mynchealthplan.com

~Laura Sedlacek is an Agent with Bush and Associates insurance in Lenoir.