A medical insurance premium is a sum of money paid to a healthcare provider to ensure healthcare coverage from that provider for a limited period of time. By collecting premiums, you must create insurance companies a pool of funds from which benefits can be paid. In many cases, additional fees known as the deductible and the copays must be met before the benefits are paid. Depending on the circumstances of a person’s employment and policy in the country where he resides, a health insurance premium can be paid by the individual employer or by the individual himself.
Health insurance premium
Basically, a health insurance premium is a base fee paid to a health care provider in exchange for a time-limited health care coverage period. The length of this period varies depending on the political type. Short-term policies can last as little as a few weeks, while long-term policies are generally renewed on an annual basis.
By collecting a health insurance contribution from each customer, you must create health insurance providers a pool of funds from which benefits can be paid to those who file claims for eligible medical care expenses. These providers need to generate sufficient earnings to pay services while remaining profitable. Thus, the total premiums paid in an insurance company are intended to exceed the amount paid to policyholders in benefits.
It is important to note that in most cases, the payment of a health insurance premium alone does not automatically qualify a policy holder’s right to receive benefits. Generally, each policyholder must meet a fixed out-of-pocket sum known as a deductible before an insurance company will begin paying dividends. Insured persons may also be responsible for a copay, or a fixed fee for a health care provider for routine service at the end of an office visit.
The exact cost of a health insurance contribution can vary greatly. Factors that may affect the premium cost include the amount of coverage offered by a policy, the length of the policy, the amount of the deductible, and the health status of the insured person. A premium may be paid in regular installments throughout the life of a policy or may be paid a lump sum at the time the coverage begins. Often, discounts are for those who pay their premium in a sum.
Depending on the circumstances of a person’s employment and policy in the country where he resides, he or she may not be responsible for paying his own health insurance premium. Employers who offer health insurance to their employees often fully or partially pay premiums on their employees’ exceptions. Those who are self-employed or unemployed generally have to pay their own premiums. Individuals living in countries offering universal health care may pay a health care tax and therefore may not be required to pay a separate health insurance premium.