Important Insurance Terms to Understand

Many people have only a cursory knowledge of insurance and how it works.

This is ok if you trust the insurance agents that you work with, but it’s always better to know more so that you can know if you’re getting the best deals on your plans.

When people get confused about insurance, it’s typically because they don’t understand some common industry terms. As a result, we have compiled a list of a few of the biggest terms that you should understand as you shop for your insurance plans. Here they are:

Deductible

The deductible of your insurance plan  is the total amount of money you need to pay out of your pocket before your insurance company will begin paying out for expenses.

Copayment

For some doctor visits or prescriptions, your insurance may not cover the entire cost. The copayment is either a percentage or a flat fee that you pay every time you have an appointment or a filled prescription.

Coinsurance

Coinsurance refers to the percentage that your insurance will pay for covering costs after you have fulfilled your payment responsibilities for deductibles and copayments.

Premium

Your premium is the amount that you pay every month for your insurance plan. This is the base cost for your plan. Plans with lower premiums tend to have higher deductibles, and plans with higher premiums tend to have lower deductibles.

Provider network

Your provider network is the group of doctors, hospitals and other medical providers that have contracts in place with your insurance company. These are the providers you can choose from if you want to have your health care costs covered by your insurance plan.

Pre-existing condition

A pre-existing condition is any type of health problem (illness, condition or injury) that you have before you get your insurance plan. Be sure to read your health insurance provider’s policies on pre-existing conditions, because they can vary from provider to provider.

If you have any questions about additional terms not covered on this list, we encourage you to contact us today. We are happy to answer any questions you have about insurance terms that you don’t completely understand.