Health Policies
This topic surveys the main kinds of health coverage a consumer can buy: medical expense plans and managed care, disability income policies, long-term care insurance, and supplemental coverage such as dental. Knowing what each product does helps match coverage to a client's needs.
Medical Expense Plans and Managed Care
Medical expense coverage pays for treatment. Traditional indemnity (fee-for-service) plans let the insured use any provider and reimburse a share of the charges. Managed care plans control costs through networks. A Health Maintenance Organization (HMO) requires the use of network providers and often a primary care physician who coordinates referrals, emphasizing prevention and lower cost. A Preferred Provider Organization (PPO) offers a network at lower cost but allows out-of-network care at a higher cost, giving more flexibility. A Point-of-Service (POS) plan blends HMO and PPO features. Major medical coverage provides broad protection with high limits after deductibles and coinsurance.
Disability Income Policies
Disability income policies pay a monthly benefit when the insured cannot work. The definition of total disability is critical: an own-occupation definition considers the insured disabled if they cannot perform their own regular occupation, which is more generous, while an any-occupation definition requires that they cannot work in any job for which they are reasonably suited, which is stricter. Residual or partial disability benefits pay when the insured can work but at reduced earnings. Renewability provisions (such as guaranteed renewable and noncancelable) determine whether the insurer can change premiums or refuse to renew.
Long-Term Care Insurance
Long-term care (LTC) insurance pays for extended custodial and personal care that standard health insurance and Medicare largely do not cover, including nursing home, assisted living, and home health care. Benefits are typically triggered when the insured cannot perform a specified number of the activities of daily living (ADLs) such as bathing, dressing, eating, toileting, transferring, and continence, or has a severe cognitive impairment such as Alzheimer's disease. Policies specify a daily or monthly benefit, an elimination period, and a benefit period, and many include inflation protection to keep pace with rising care costs.
Supplemental and Limited Coverage
Several products supplement primary coverage. Dental plans cover preventive, basic, and major dental services, sometimes with separate deductibles and annual maximums. Vision plans cover exams and corrective lenses. Specified (dread) disease policies pay for a named illness such as cancer. Hospital indemnity plans pay a fixed cash amount per day of hospitalization regardless of actual charges. Accident-only policies cover injuries but not sickness. Because these are limited-benefit products, producers must be clear that they supplement, rather than replace, comprehensive major medical coverage.