Question

Discuss the general concept of insurance and its general principles. Describe the various type of private health insurance options, pointing out the differences among them.

Answer 1

Concept of insurance:
   Insurance is a policy for individual or organization that receive financial protection and reimbursement if any damage or error from the insurer or the insurance company..It will protect us from any possible financial losses..
General principles:
The principle of insurance that entity will spend some portion of amount against a possibility of a huge unexpected loss..If any loss that policymaker suffer that will be paid out of their premiums which they pay..It is a contract between both parties they have to follow the principles
1, Utmost good faith:
It is important that relevant facts that insured disclose to the insurance company..insurance policy and its rights should be followed by the insured and insurer..
2, Insurable interest:
There is equal insured rights that owner of the insured property means that the person have some investment in it..Insurer will be fully incharge if there is any damage..
3, Indemnity:
Insurer responsible for compensating the insured against any damage or loss..
4, Subrogation:
Once the compensation paid for damages,the ownership will shift from insured to the insurer..so insured will not make profit for it..
5, Contribution:
If more than one insurer are there they should be shared compensation..
6,Proximate cause:
If the property is insured only against the incidents,if loss is more than effective cause of damage should be considered..
Private health insurance:
Private health insurance is not a government run agencies,it is run by private health insurance companies,health insurance agents..it is an off exchange plan,it is not under federal health insurance market place and not under Affordable Care Act..Private health insurance cover generally hospital treatment and ambulance care etc..
There are five types of private health insurance:
Health Maintenance organization(HMO):
It is one of the health insurance coverage that limits in number of members to care provided by doctors who work with the contract with HMO..
Preferred Provider Organization(PPO):
It includes medical providers like doctors and hospital health insurance..
Point of Service(POS):
It includes primary care doctors and specialist..
Exclusive provider organization(EPO):
It is same as HMO, it has smaller network can save premium costs.
Supplemental health insurance:
It covers eye,dental and other medical plans..