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health insurance policy is a binding contract issued by an insurance
company to an individual or group which promises to pay for health care
reasonably required by the "insured" or "policy holder"
or "certificate holder" to treat illness or injury. If the insurance
policy is issued to an individual, the individual applies for the policy and
pays the premiums either directly or through payroll deduction. Typically,
in individual health insurance the individual policyholder is insured
and also, in exchange for a higher premium, the insurance covers a spouse and
dependent family members. In
the circumstance where the health insurance is obtained by an employer
or a group or an association, the entity is the "group policyholder"
and the covered individuals receive "certificates" of insurance.
Generally, in addition to payment of premiums by the policyholder, the insured
is also responsible for payment of deductibles and co-pays (a percentage of actual
charges or a fixed amount per visit) which are predetermined in the policy
at set amounts or rates. |
