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Health/Life Coverage Explained

Health

Individual health insurance policies are best suited for an individual whose employer does not offer any or adequate small group insurance or group insurance coverage.

Small Group Medical Insurance

• for smaller businesses with 50 employees or less. While individual health insurance plans can deny coverage or increase rates to a specific individual due to poor medical conditions, a group medical plan cannot. Insurance companies must accept the entire group or none at all, and they cannot increase rates to one individual. With group insurance plans, there is strength in numbers.
  
  

Fee-For-Service Policies

• the least restrictive plans
• employees can choose the care provider of their choice
• May have higher out-of-pocket expenses
• If employees prefer preventive care and low out-of-pocket expenses, a managed care plan may be better suited
  
  

Unless a policy specifically states that property is covered for its replacement value, coverage is for the lower, actual cash value. Check your policy, or ask your Lighthouse Insurance representative if you are not sure about your level of coverage.

Managed Care

• More affordable if the insured stay within their network of care providers
• Restriction to doctors and hospitals within a managed care network (may be an issue for some employees)
• higher out-of-pocket expenses for freedom of choice
  
  

If your employer does not offer group insurance, or if the insurance offered is very limited, you can buy an individual policy. Plans include: 

• Fee-for-service
• HMO
• PPO
• POS
  
  

Fee-for-Service (Indemnity) Health Insurance

• Traditional health care policy
• Insurance companies pay fees for the services provided to the insured
• Offers the freedom to choose doctors and hospitals
• Can change doctors at any time
• Can use any hospital in any part of the country
• Generally a yearly deductible is charged and a percentage of costs above the deductible are covered. An example might include a $250.00 deductible and 80% coverage once the deductible is reached
  
  

Remember, when making major purchases, add them to your inventory and check with your insurer. You may need to increase your coverage levels. Most policies underwritten by companies that Lighthouse represents provide 70 percent coverage, rather than 50 percent.

HMO (Health Maintenance Organization) Coverage

• Prepaid health plans
• Monthly premium pays for the HMO to provide comprehensive care for the insured, including doctor visits, hospital stays, emergency care, surgery, lab tests, x-rays, and therapy
• Care is provided directly in its own group practice or through doctors and other health care professionals under contract
• Limited choice of doctors and hospitals to those under agreement with the HMO (exceptions can be made in emergencies or when medically necessary.)
  
  

PPO (Preferred Provider Organization) Coverage

• A cross between traditional fee-for-service and an HMO
• Like an HMO, there are a specific doctors and hospitals from which to choose
• Can use doctors who are not part of the plan and still receive some coverage
• Best for individuals who want an HMO style prepaid plan, but want a doctor that is not part of the network
• Geared towards preventative care
• Includes a broad range of services
  
  

Obtaining Sufficient Coverage

• For coverage for thirty years or less, a term policy may have an advantage
• For coverage beyond thirty years, a Universal Life or Whole Life policy is most effective
• If your life insurance needs change, check your policy for a conversion privilege that will allow you to covert your term coverage to permanent Universal Life or a Whole Life policy without a medical examination
  
  

Obtaining Sufficient Coverage

• Initially, premiums are generally lower than those for permanent insurance, allowing you to buy higher levels of coverage with maximum protection when you need it.
• It's good for covering specific needs that will disappear in time, such as mortgages or family income needs for children. Term insurance is an effective way to get the most coverage at a low cost for up to thirty years.
• On most policies, the premium may increase after the guarantee period expires.
• Coverage may terminate at the end of the policy term or may become too expensive to continue.
• Generally, the policy doesn't offer cash value or paid-up insurance