Buyers Guide For Health Insurance
Making Sense of Health Insurance
How Do I Get Health Coverage?
What Is Not Covered?
What Happens to My Insurance if I Lose My Job?
Frequently Asked Questions
Other Forms of Health Insurance
A Final Word
If you have ever been sick or injured, you know how important it
is to have health coverage. But if you’re confused about what kind
is best for you, you’re not alone.
What types of health coverage are available? If your employer
offers you a choice of health plans, what should you know before
making a decision? In addition to coverage for medical expenses, do
you need some other kind of insurance? What if you are too ill to
work? Or, if you are over 65,will Medicare pay for all your medical
These are questions that today’s consumers are asking; and
these questions aren’t necessarily easy to answer.
This booklet should help. It discusses the basic forms of health
coverage and includes a checklist to help you compare plans. It
answers some commonly asked questions and also includes thumbnail
descriptions of other forms of health insurance, including
hospital-surgical policies, specified disease policies, catastrophic
coverage, hospital indemnity insurance, and disability, long-term
care, and Medicare supplement insurance.
While we know that our guide can’t answer all your questions,
we think it will help you make the right decisions for yourself,
your family, and even your business.
Making Sense of Health Insurance
The term health insurance refers to a wide variety of insurance
policies. These range from policies that cover the costs of doctors
and hospitals to those that meet a specific need, such as paying for
long-term care. Even disability insurance—which replaces lost
income if you can’t work because of illness or accident—is
considered health insurance, even though it’s not specifically for
But when people talk about health insurance, they usually mean
the kind of insurance offered by employers to employees, the kind
that covers medical bills, surgery, and hospital expenses. You may
have heard this kind of health insurance referred to as
comprehensive or major medical policies, alluding to the broad
protection they offer. But the fact is, neither of these terms is
particularly helpful to the consumer.
Today, when people talk about broad health care coverage, instead
of using the term "major medical," they are more likely to
refer to fee-for-service or managed care. These terms apply to
different kinds of coverage or health plans. Moreover, you’ll also
hear about specific kinds of managed care plans: health maintenance
organizations or HMOs, preferred provider organizations or PPOs, and
point-of-service or POS plans.
While fee-for-service and managed care plans differ in important
ways, in some ways they are similar. Both cover an array of medical,
surgical, and hospital expenses. Most offer some coverage for
prescription drugs, and some include coverage for dentists and other
providers. But there are many important differences that will make
one or the other form of coverage the right one for you.
The section below is designed to acquaint you with the basics of
fee-for-service and managed care plans. But remember: The detailed
differences between one plan and another can only be understood by
careful reading of the materials provided by insurers, your employee
benefits specialist, or your agent or broker.
This type of coverage generally assumes that the medical provider
(usually a doctor or hospital) will be paid a fee for each service
rendered to the patient—you or a family member covered under your
policy. With fee-for-service insurance, you go to the doctor of your
choice and you or your doctor or hospital submits a claim to your
insurance company for reimbursement. You will only receive
reimbursement for "covered" medical expenses, the ones
listed in your benefits summary.
When a service is covered under your policy, you can expect to be
reimbursed for some, but generally not all, of the cost. How much
you will receive depends on the provisions of the policy on
coinsurance and deductibles. Here’s how it works:
- The portion of the covered medical expenses you pay is called
Although there are variations, fee-for-service policies often
reimburse doctor bills at 80 percent of the "reasonable and
customary charge." (This is the prevailing cost of a
medical service in a given geographic area.) You pay the other
20 percent—your coinsurance.
However, if a medical provider charges more than the reasonable
and customary fee, you will have to pay the difference. For
example, if the reasonable and customary fee for a medical
service is $100, the insurer will pay $80. If your doctor
charged $100, you will pay $20. But if the doctor charged $105,
you will pay $25.
Note that many fee-for-service plans pay hospital expenses in
full; some reimburse at the 80/20 level as described above.
- Deductibles are the amount of the covered expenses you must
pay each year before the insurer starts to reimburse you. These
might range from$100 to $300 per year per individual, or $500 or
more per family. Generally, the higher the deductible, the lower
the premiums, which are the monthly, quarterly, or annual
payments for the insurance.
- Policies typically have an out-of-pocket maximum. This means
that once your expenses reach a certain amount in a given
calendar year, the reasonable and customary fee for covered
benefits will be paid in full by the insurer. (If your doctor
bills you more than the reasonable and customary charge, you may
still have to pay a portion of the bill.) Note that Medicare
limits how much a physician may charge you above the usual
- There also may be lifetime limits on benefits paid under the
policy. Most experts recommend that you look for a policy whose
lifetime limit is at least $1 million. Anything less may prove
to be inadequate.
The three major types of managed care plans are health
maintenance organizations (HMOs), preferred provider organizations (PPOs),
and point-of-service (POS) plans.
Managed care plans generally provide comprehensive health
services to their members, and offer financial incentives for
patients to use the providers who belong to the plan. In managed
care plans, instead of paying separately for each service that you
receive, your coverage is paid in advance. This is called prepaid
For example, you may decide to join a local HMO where you pay a
monthly or quarterly premium. That premium is the same whether you
use the plan’s services or not. The plan may charge a copayment
for certain services—for example, $10 for an office visit, or $5
for every prescription. So, if you join this HMO, you may find that
you have few out-of-pocket expenses for medical care—as long as
you use doctors or hospitals that participate in or are part of the
HMO. Your share may be only the small copayments; generally, you
will not have deductibles or coinsurance.
One of the interesting things about HMOs is that they deliver
care directly to patients. Patients sometimes go to a medical
facility to see the nurses and doctors or to a specific doctor’s
office. Another common model is a network of individual
practitioners. In these individual practice associations (IPAs), you
will get your care in a physician’s office.
If you belong to an HMO, typically you must receive your medical
care through the plan. Generally, you will select a primary care
physician who coordinates your care. Primary care physicians may be
family practice doctors, internists, pediatricians, or other types
of doctors. The primary care physician is responsible for referring
you to specialists when needed. While most of these specialists will
be "participating providers" in the HMO, there are
circumstances in which patients enrolled in an HMO may be referred
to providers outside the HMO network and still receive coverage.
PPOs and POS plans are categorized as managed care plans.
(Indeed, many people call POS plans "an HMO with a
point-of-service option.") From the consumer’s point of view,
these plans combine features of fee-for-service and HMOs. They offer
more flexibility than HMOs, but premiums are likely to be somewhat
With a PPO or a POS plan, unlike most HMOs, you will get some
reimbursement if you receive a covered service from a provider who
is not in the plan. Of course, choosing a provider outside the
plan’s network will cost you more than choosing a provider in the
network. These plans will act like fee-for-service plans and charge
you coinsurance when you go outside the network.
What is the difference between a PPO and a POS plan? A POS plan
has primary care physicians who coordinate patient care; and in most
cases, PPO plans do not. But there are exceptions!
HMOs and PPOs have contracts with doctors, hospitals, and other
providers. They have negotiated certain fees with these
providers—and, as long as you get your care from these providers,
they should not ask you for additional payment. (Of course, if your
plan requires a copayment at the time you receive care, you will
have to pay that.)
Always look carefully at the description of the plans you are
considering for the conditions of payment. Check with your employer,
your benefits manager, or your state department of insurance to find
out about laws that may regulate who is responsible for payment.
Your employer may have set up a financial arrangement that helps
cover employees’ health care expenses. Sometimes employers do this
and have the "health plan" administered by an insurance
company; but sometimes there is no outside administrator. With
self-insured health plans, certain federal laws may apply. Thus, if
you have problems with a plan that isn’t state regulated, it’s
probably a good idea to talk to an attorney who specializes in
HMOs, PPOs, and fee-for-service plans often share certain
features, including pre authorization, utilization review, and
For example, you may be asked to get authorization from your plan
or insurer before admission to a hospital for certain types of
surgery. Utilization review is the process by which a plan
determines whether a specific medical or surgical service is
appropriate and/or medically necessary. Discharge planning is an
approach that facilitates the transfer of a patient to amore
cost-effective facility if the patient no longer needs to stay in
the hospital. For example, if, following surgery, you no longer need
hospitalization but cannot be cared for at home, you may be
transferred to a skilled nursing facility.
Almost all fee-for-service plans apply managed care techniques to
contain costs and guarantee appropriate care; and an increasing
number of managed care plans contain fee-for-service elements. While
the distinctions among plans are growing increasingly blurred, the
number of options available to consumers increases every day.
How Do I Get Health Coverage?
Health insurance is generally available through groups and to
individuals. Premiums—the regular fees that you pay for health
insurance coverage—are generally lower for group coverage. When
you receive group insurance at work, the premium usually is paid
through your employer.
Group insurance is typically offered through employers, although
unions, professional associations, and other organizations also
offer it. As an employee benefit, group health insurance has many
advantages. Much—although not all—of the cost may be borne by
the employer. Premium costs are frequently lower because economies
of scale in large groups make administration less expensive. With
group insurance, if you enroll when you first become eligible for
coverage, you generally will not be asked for evidence that you are
insurable. (Enrollment usually occurs when you first take a job,
and/or during a specified period each year, which is called open
enrollment.) Some employers offer employees a choice of
fee-for-service and managed care plans. In addition, some group
plans offer dental insurance as well as medical.
Individual insurance is a good option if you work for a small
company that does not offer health insurance or if you are
self-employed. Buying individual insurance allows you to tailor a
plan to fit your needs from the insurance company of your choice. It
requires careful shopping, because coverage and costs vary from
company to company. In evaluating policies, consider what medical
services are covered, what benefits are paid, and how much you must
pay in deductibles and coinsurance. You may keep premiums down by
accepting a higher deductible.
Many people worry about coverage for preexisting conditions,
especially when they change jobs. The Health Insurance Portability
and Accountability Act (HIPAA) helps assure continued health
insurance coverage for employees and their dependents. Starting July
1, 1997, insurers could impose only one 12-month waiting period for
any preexisting condition treated or diagnosed in the previous six
months. Your prior health insurance coverage will be credited toward
the preexisting condition exclusion period as long as you have
maintained continuous coverage without a break of more than 62 days.
Pregnancy is not considered a preexisting condition, and newborns
and adopted children who are covered within 30 days are not subject
to the 12-monthwaiting period.
If you have had group health coverage for two years, and you
switch jobs and go to another plan, that new health plan cannot
impose another preexisting condition exclusion period. If, for
example, you have had prior coverage of only eight months, you may
be subject to a four-month, preexisting condition exclusion period
when you switch jobs. If you’ve never been covered by an
employer’s group plan, and you get a job that offers such
coverage, you may be subject to a 12-month, preexisting condition
Federal law also makes it easier for you to get individual
insurance under certain situations, including if you have left a job
where you had group health insurance, or had another plan for more
than 18 months without a break of more than 62 days.
If you have not been covered under a group plan and have found it
difficult to get insurance on your own, check with your state
insurance department to see if your state has a risk pool. Similar
to risk pools for automobile insurance, these can provide health
insurance for people who cannot get it elsewhere.
What Is Not Covered?
While HMO benefits are generally more comprehensive than those of
traditional fee-for-service plans, no health plan will cover every
Very few plans cover eyeglasses and hearing aids because these
are considered budgetable expenses. Very few cover elective cosmetic
surgery, except to correct damage caused by a covered accidental
injury. Some fee-for-service plans do not cover checkups. Procedures
that are considered experimental may not be covered either. And some
plans cover complications arising from pregnancy, but do not cover
normal pregnancy or childbirth.
Health insurance policies frequently exclude coverage for
preexisting conditions, but, as explained, federal law now limits
exclusions based on such conditions.
You should also remember that insurers will not pay duplicate
benefits. You and your spouse may each be covered under a health
insurance plan at work but, under what is called a
"coordination of benefits" provision, the total you can
receive under both plans for a covered medical expense cannot exceed
100 percent of the allowable cost. Also note that if neither of your
plans covers 100 percent of your expenses, you will only be covered
for the percentage of coverage (for example, 80 percent) that your
primary plan covers. This provision benefits everyone in the long
run because it helps to keep costs down.
What Happens to My Insurance if I Lose My Job?
If you have had health coverage as an employee benefit and you
leave your job, voluntarily or otherwise, one of your first concerns
will be maintaining protection against the costs of health care. You
can do this in one of several ways:
- First, you should know that under a federal law (the
Consolidated Omnibus Budget Reconciliation Act of 1985, commonly
known as COBRA), group health plans sponsored by employers with
20 or more employees are required to offer continued coverage
for you and your dependents for 18 months after you leave your
job. (Under the same law, following an employee’s death or
divorce, the worker’s family has the right to continue
coverage for up to three years.) If you wish to continue your
group coverage under this option, you must notify your employer
within 60 days. You must also pay the entire premium, up to 102
percent of the cost of the coverage.
- If COBRA does not apply in your case—perhaps because you
work for an employer with fewer than 20 employees—you may be
able to convert your group policy to individual coverage. The
advantage of that option is that you may not have to pass a
medical exam, although an exclusion based on a preexisting
condition may apply, depending on your medical history and your
- If COBRA doesn’t apply and converting your group coverage is
not for you, then, if you are healthy, not yet eligible for
Medicare, and expect to take another job, you might consider an
interim or short-term policy. These policies provide medical
insurance for people with a short-term need, such as those
temporarily between jobs or those making the transition between
college and a job. These policies, typically written for two to
six months and renewable once, cover hospitalization, intensive
care, and surgical and doctors’ care provided in the hospital,
as well as expenses for related services performed outside the
hospital, such as X-rays or laboratory tests.
- Another possibility is obtaining coverage through an
association. Many trade and professional associations offer
their members health coverage—often HMOs—as well as basic
hospital-surgical policies and disability and long-term care
insurance. If you are self-employed, you may find association
membership an attractive route.
Frequently Asked Questions
Q What is the first thing I should know about buying health
A Your aim should be to insure yourself and your family
against the most serious and financially disastrous losses that can
result from an illness or accident. If you are offered health
benefits at work, carefully review the plans’ literature to make
sure the one you select fits your needs. If you purchase individual
coverage, buy a policy that will cover major expenses and pay them
to the highest maximum level. Save money on premiums, if necessary,
by taking large deductibles and paying smaller costs out-of-pocket.
Q Can I buy a single health insurance policy that will
provide all the benefits I’m likely to need?
A No. Although you can select a plan or buy a policy that
should cover most medical, hospital, surgical, and pharmaceutical
bills, no single policy covers everything. Moreover, you may want to
consider additional single-purpose policies like long-term care or
disability income insurance. If you are over 65, you may want a
Medicare supplement policy to fill in the gaps in Medicare coverage.
Q I’m planning to keep working after age 65. Will I be
covered by Medicare or by my company’s health insurance?
A If you work for a company with 20 or more employees, your
employer must offer you (through age 69) the same health insurance
coverage offered to younger employees. After you reach age 65, you
may choose between Medicare and your company’s plan as your
primary insurer. If you elect to remain in the company plan, it will
pay first—for all benefits covered under the plan—before
Medicare is billed. In most instances, it is to your advantage to
accept continued employer coverage.
But be sure to enroll in Medicare Part A, which covers
hospitalization and can supplement your group coverage at no
additional cost to you. You can save on Medicare premiums by not
enrolling in Medicare Part B until you finally retire. Bear in mind,
though, that delayed enrollment is more expensive and entails a
waiting period for coverage.
Q I’ve had a serious health condition that appears to be
stabilized. Can I buy individual health coverage?
A Depending on what your condition is and when it was
diagnosed and treated, you can probably buy health coverage.
However, the insurer may do one of three things:
• provide full protection but with a higher premium, as might be
the case with a chronic disease, such as diabetes;
• modify the benefits to increase the deductible;
• exclude the specific medical problem from coverage, if it is a
clearly defined condition, as long as the insurer abides by state
and federal laws on exclusions.
Q One of my medical bills was turned down by the insurance
company (or health plan). Is there anything I can do?
A Ask the insurance company why the claim was rejected. If
the answer is that the service isn’t covered under your policy,
and you’re sure that it is covered, check to see that the provider
entered the correct diagnosis or procedure code on the insurance
claim form. Also check that your deductible was correctly
Make sure that you didn’t skip an essential step under your
plan, such as pre admission certification. If everything is in
order, ask the insurer to review the claim.
Whether you end up choosing a fee-for-service plan or a form of
managed care, you must examine a benefits summary or an outline of
coverage—the description of policy benefits, exclusions, and
provisions that makes it easier to understand a particular policy
and compare it with others.
Look at this information closely. Think about your personal
situation. After all, you may not mind that pregnancy is not
covered, but you may want coverage for psychological counseling. Do
you want coverage for your whole family or just yourself? Are you
concerned with preventive care and checkups? Or would you be
comfortable in a managed care setting that might restrict your
choice somewhat but give you broad coverage and convenience? These
are questions that only you can answer.
Here are some of the things to look at when choosing and
comparing health insurance plans.
Health Insurance Checklist
Covered medical services
- Inpatient hospital services
- Outpatient surgery
- Physician visits (in the hospital)
- Office visits
- Skilled nursing care
- Medical tests and X-rays
- Prescription drugs
- Mental health care
- Drug and alcohol abuse treatment
- Home health care visits
- Rehabilitation facility care
- Physical therapy
- Speech therapy
- Hospice care
- Maternity care
- Chiropractic treatment
- Preventive care and checkups
- Well-baby care
- Dental care
- Other covered services
Are there any medical service limits, exclusions, or preexisting
conditions that will affect you or your family?
What types of utilization review, pre authorization, or
certification procedures are included?
How much is the premium?
Are there any discounts available for good health or healthy
behaviors (e.g., non-smoker)?
How much is the annual deductible?
$_________________________________ per person
$_________________________________ per family
What coinsurance or co-payments apply?
_________________________________% after I meet my deductible
$_________________________________copay or % coinsurance per
$_________________________________copay or % coinsurance for
"wellness" care (includes well-baby care, annual eye exam,
$_________________________________% copay or coinsurance for
inpatient hospital care
Other Forms of Health Insurance
In addition to broad coverage for medical, surgical, and hospital
expenses, there are many other kinds of health insurance.
Hospital-surgical policies, sometimes called basic health
insurance, provide benefits when you have a covered condition that
requires hospitalization. These benefits typically include room and
board and other hospital services, surgery, physicians’ non
surgical services that are performed in a hospital, expenses for
diagnostic X-rays and laboratory tests, and room and board in an
extended care facility.
Benefits for hospital room and board may be a per-day dollar
amount or all or part of the hospital’s daily rate for a
semi-private room. Benefits for surgery typically are listed,
showing the maximum benefit for each type of surgical procedure.
Hospital-surgical policies may provide "first-dollar"
coverage. That means that there is no deductible, or amount that you
have to pay, for a covered medical expense. Other policies may
contain a small deductible.
Keep in mind that hospital-surgical policies usually do not cover
lengthy hospitalizations and costly medical care. In the event that
you need these types of services, you may incur large expenses that
are difficult to meet unless you have other insurance.
Catastrophic coverage pays hospital and medical expenses above a
certain deductible; this can provide additional protection if you
hold either a hospital-surgical policy or a major medical policy
with a lower-than-adequate lifetime limit. These policies typically
contain a very high deductible ($15,000 or more) and a maximum
lifetime limit high enough to cover the costs of catastrophic
Specified or dread disease policies provide benefits only if you
get the specific disease or group of diseases named in the policy.
For example, a policy might cover only medical care for cancer.
Because benefits are limited in amount, these policies are not a
substitute for broad medical coverage. Nor are specified disease
policies available in every state.
Hospital indemnity insurance pays you a specified amount of cash
benefits for each day that you are hospitalized, generally up to a
designated number of days. These cash benefits are paid directly to
you, can be used for any purpose, and may be useful in meeting
out-of-pocket expenses not covered by other insurance.
Hospital indemnity policies frequently are available directly
from insurance companies by mail as well as through insurance
agents. You will find that these policies offer many choices, so be
sure to ask questions and find the right plan to meet your needs.
Some policies contain limitations on preexisting medical
conditions that you may have before your insurance takes effect.
Others contain an elimination period, which means that benefits will
not be paid until after you have been hospitalized for a specified
number of days. When you apply for the policy, you may be allowed to
choose among two or three elimination periods, with different
premiums for each. Although you can reduce your premiums by choosing
a longer elimination period, you should bear in mind that most
patients are hospitalized for relatively brief periods of time.
If you purchase a hospital indemnity policy, periodically review
it to see if you need to increase your daily benefits to keep pace
with rising health care costs.
Medicare supplement insurance, sometimes called Medigap or MedSup,
is private insurance that helps cover some of the gaps in Medicare
Medicare is the federal program of hospital and medical insurance
primarily for people age 65 and over who are not covered by an
employer’s plan. But Medicare doesn’t cover all medical
expenses. That’s where MedSup comes in.
All Medicare supplement policies must cover certain expenses,
such as the daily coinsurance amount for hospitalization and 90
percent of the hospital charges that otherwise would have been paid
by Medicare, after Medicare is exhausted. Some policies may offer
additional benefits, such as coverage for preventive medical care,
prescription drugs, or at-home recovery.
There are 10 standard Medicare supplement policies, designated by
the letters A through J. With these standardized policies, it is
much easier to compare the costs of policies issued by different
insurers. While all10 standard policies may not be available to you,
Plan A must be made available to Medicare recipients everywhere.
Insurers are not permitted to sell policies that duplicate
benefits you already receive under Medicare or other policies. If
you decide to replace an existing Medicare supplement policy—and
you should do so only after careful evaluation—you must sign a
statement that you intend to replace your current policy and that
you will not keep both policies in force.
People who are 65 or older can buy Medicare supplement insurance
without having to worry about being rejected for existing medical
problems, so long as they apply within six months after enrolling in
Long-term care policies cover the medical care, nursing care, and
other assistance you might need if you ever have a chronic illness
or disability that leaves you unable to care for yourself for an
extended period of time. These services generally are not covered by
other health insurance. You may receive long-term care in a nursing
home or in your own home.
Long-term care can be very expensive. On average, a year in a
nursing home costs about $40,000. In some regions, it may cost much
more. Home care is less expensive, but it still adds up. (Home care
can include part-time skilled nursing care, speech therapy, physical
or occupational therapy, home health aides, and homemakers.)
Bringing an aide into your home just three times a week—to help
with dressing, bathing, preparing meals, and similar chores—easily
can cost$1,000 a month, or $12,000 a year. Add in the cost of
skilled help, such as physical therapy, and the costs can be much
Most long-term care policies pay a fixed dollar amount, typically
from$40 to more than $200 a day, for each day you receive covered
care in a nursing home. The daily benefit for at-home care is
usually half the benefit for nursing home care. Because the per-day
benefit you buy today may be inadequate to cover higher costs in the
future, most policies also offer an inflation adjustment feature.
Keep in mind that unless you have a long-term care policy, you
are not covered for long-term care expenses under Medicare and most
other types of insurance. Recent changes in federal law may allow
you to take certain income tax deductions for some long-term care
expenses and insurance premiums.
Disability insurance provides you with an income if illness or
injury prevents you from being able to work for an extended period
of time. It is an important but often overlooked form of insurance.
There are other possible sources of income if you are disabled.
Social Security provides protection, but only to those who are
severely disabled and unable to work at all; workers’ compensation
provides benefits if the illness or injury is work-related; civil
service disability covers federal or state government workers; and
automobile insurance may pay benefits if the disability results from
an automobile accident. But these sources are limited.
Some employers offer short- and long-term disability coverage. If
you are self-employed, you can buy individual disability income
insurance policies. Generally:
- Monthly benefits are usually 60 percent of your income at the
time of purchase, although cost-of-living adjustments may be
- If you pay the premiums for an individual disability policy,
payments you receive under the policy are not subject to income
tax. If your employer has paid some or all of the premiums under
a group disability policy, some or all of the benefits may be
Whether you are an employer shopping for a group disability
policy or someone thinking of purchasing disability income
insurance, you will need to evaluate different policies. Here are
some things to look for:
- Some policies pay benefits only if someone is unable to
perform the duties of their customary occupation, while others
pay only if the person can engage in no gainful employment at
all. Make sure that you know the insurer’s definition of
- Some policies pay only for accidents, but it’s important to
be insured for illness, too. Be sure, as you evaluate policies,
that both accident and illness are covered.
- Benefits may begin anywhere from one month to six months or
more after the onset of disability. A later starting date can
keep your premiums down. But remember, if your policy only
starts to pay (for example) three months after the disability
begins, you may lose a considerable amount of income.
- Benefits may be payable for a period ranging anywhere from one
year to a lifetime. Since disability benefits replace income,
most people do not need benefits beyond their working years. But
it’s generally wise to insure at least until age 65 since a
lengthy disability threatens financial security much more than a
A Final Word
If you get health care coverage at work, or through a trade or
professional association or a union, you are almost certainly
enrolled under a group contract. Generally, the contract is between
the group and the insurer, and your employer has done comparison
shopping before offering the plan to the employees. Nevertheless,
while some employers only offer one plan, some offer more than one.
Compare plans carefully!
If you are buying individual insurance, or any form of insurance
that you purchase directly, read and compare the policies you are
considering before you buy one, and make sure you understand all of
the provisions. Marketing or sales literature is no substitute for
the actual policy. Read the policy itself before you buy.
Ask for a summary of each policy’s benefits or an outline of
coverage. Good agents and good insurance companies want you to know
what you are buying. Don’t be afraid to ask your benefits manager
or insurance agent to explain anything that is unclear.
It is also a good idea to ask for the insurance company’s
rating. The A.M. Best Company, Standard & Poor’s Corporation,
and Moody’s all rate insurance companies after analyzing their
financial records. These publications that list ratings usually can
be found in the business section of libraries.
And bear in mind: In some cases, even after you buy a policy, if
you find that it doesn’t meet your needs, you may have 30 days to
return the policy and get your money back. This is called the