A little knowledge can go a long way in the search for a cheap health insurance policy. If you know your terminology, you can find and understand a discount insurance plan that fits your lifestyle without straining your budget.

The Basics of Health Insurance

Think of your health insurance package as a scale, with your premium on one side and elements like deductibles, prescription costs, and co-pays on the other. When your premiums are higher, your other costs are typically lower. Conversely, a lower monthly premium could mean much higher costs if you have to go to the doctor or fill a prescription.

Health insurance providers offer two basic types of coverage: Health Maintenance Organization (HMO) and Preferred Provider Organization (PPO). One type is not necessarily better than the other–rather, knowing the advantages and disadvantages of each can give you the knowledge you need to pick a plan that works for you, your income, and your family.

HMO Insurance: Restricted but Cost-Effective

Under an HMO plan, doctors and hospitals band together to form a network of patient services. After you select a primary care physician, you must go through that doctor if you need a referral to a specialist. Co-pays are generally low with HMO plans and your expenditures are not high even if you need regular visits.

The downside of HMO plans is their restrictions. If your current doctor is not a member of the HMO network, you need to change physicians. Additionally, some physicians make up for low co-pays by seeing many patients, which means you may feel a lack of personal attention in the doctor’s office.

PPO Insurance: More Control, More Expense

If you need flexibility in your insurance plan, a PPO plan may be the way to go. PPO plans are not as restricted as HMOs–while there is still a list of preferred doctors and hospitals, you can visit an out-of-network provider, but you have to pay more. This plan works best if you need to see a number of specialists and want to avoid the hassle of obtaining a referral from a primary care physician. You pay for the convenience in monthly premiums, however, and you should weigh the benefits against the costs before making a decision.

In the end, your best insurance policy is the one that fits your lifestyle. Getting free quotes on a range of insurance policies is the best way to compare costs and benefits and determine which plan works best for you and your family.

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Going Uninsured Can Cost More Than a Cheap Health Insurance Policy

Statistics indicate that uninsured workers often pay the same amount in unexpected health care costs as they would have for discount insurance premiums. One recent study suggests that Americans without health insurance often pay more than $1,000 for health care services that might otherwise be covered or offset by insurance. Worse than that, if you develop a chronic condition or illness while uninsured it may not be covered by insurance once you buy it — or you may even find yourself uninsurable. Obtaining free quotes from insurance agents can put your own potential savings into perspective.

Relying on Emergency Rooms Can Complicate Simple Illnesses

After waking up with stomach pain, an uninsured fashion industry worker waited seven hours to receive a diagnosis: appendicitis. Unable to qualify for a longer hospital stay, he was discharged after one night. Complications from delayed treatment and a quick discharge caused rashes, swelling, and a life-threatening fever. Experts note that a patient with even a cheap health insurance policy would have been treated far more quickly and with more care, minimizing pain and future illness.

Avoiding Treatment Puts Communities at Risk

The high profile case of a traveler with tuberculosis brought attention to the potential consequences of untreated illnesses. However, officials warn that uninsured service industry professionals can endanger entire communities by working sick. According to one study, fewer than one in five food workers in California have health insurance. Without proper coverage, uninsured cooks and servers can put diners at risk of contracting illnesses like hepatitis or tuberculosis.

Health Insurance Gaps Can Slow Down Your Career

A growing number of colleges and universities now decline enrollment for students who cannot provide proof of current health insurance. Such policies protect schools from lawsuits filed by families of other students who become ill when exposed to an untreated, uninsured classmate. For working adults attending career training programs, this requirement can delay completion of degree or certification programs necessary for career advancement.

Debt and Bankruptcy from Unexpected Medical Bills Can Put Dreams on Hold

In 2005, Harvard researchers discovered that medical bills caused more bankruptcies than other debts. Over two million Americans claim bankruptcy every year because of unpaid hospital expenses. Under stringent bankruptcy laws, an illness or injury can cause financial strain on a family for ten years, if not longer. A discount insurance plan that covers only catastrophic illness or injury can be enough to protect your family against financial ruin.

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Group vs. Individual Plans

Many Americans first receive health insurance through a group plan, often sponsored by an employer. Because most groups are tightly defined, underwriters can often predict a group’s overall health care needs. Meanwhile, participants in individual plans are evaluated based on broad demographics. Therefore, premiums for participants in group coverage plans tend to be much less expensive than premiums for individual plans. In many states, knowledgeable health insurance agents can help self-employed professionals qualify for group coverage.

HMO, PPOs, and POS

Nearly all discount insurance plans rely on one of three systems to help keep costs down. A Health Management Organization (HMO) requires enrollees to work through a network of primary care physicians who coordinate referrals to specialists. Preferred Provider Organizations (PPO) offer more flexibility by allowing enrollees to visit any participating doctor. Point of Sale (POS) plans coordinate coverage through primary care physicians and a network of discounted health care facilities.

Mixing Deductibles with Medical Savings Accounts

Every health plan sets a deductible, or an amount that policyholders are required to pay before benefits kick in. Typically, a cheap health insurance policy comes with a higher deductible. Many discount insurance providers now offer tax-advantaged medical savings programs that can be used to cover high deductibles. These plans offer healthy individuals the opportunity to lower monthly health care expenses while building an emergency savings fund.

Understanding Covered Services

Each health insurance package offers a fixed list of covered services. Discount insurance packages frequently cover only preventive care visits and medical emergencies. Consumers often bear the full cost of elective procedures or specialist visits under such plans. Families with young children or prospective parents should consider health insurance policies with more comprehensive coverage, despite higher premiums. State and federal regulations require agents to disclose a list of covered services when providing free quotes.

How Pre-Existing Conditions Affect Coverage

Throughout most of the country, discount insurance packages enforce special rules for consumers with medical conditions that predate their insurance policies. Companies that cover pre-existing conditions often do so at a higher rate. Some states allow underwriters to reject applicants with severe pre-existing conditions. Most states that allow health insurance carriers to reject applicants also facilitate “high risk pools.” These state-subsidized programs offset the costs of treating pre-existing conditions for patients who otherwise would not have access to traditional health insurance.

• How to Choose a Health Insurance Agent

Fact #1: Whether you buy direct or work with an agent, health insurance costs the same.
State regulations require health insurance providers to publish their rates on a regular basis. In fact, rates stay the same regardless of where a consumer purchases their policy. Getting outside assistance with health insurance quotes saves a lot of time and won’t cost you any more money.

Fact #2: Tight competition for new customers has led some agents to position their offerings as discount insurance.
In fact, agents and providers cannot simply lower their rates on a whim. State agencies must confirm discount insurance rates, which are available only to members of qualifying groups, such as:

• Small business associations
• Professional associations
• Fraternal organizations
• Alumni groups
• Military or law enforcement organizations

In some states, agents can help individuals qualify for membership in an organization that can help them obtain discount insurance.

Fact #3: Accurate health records can help your broker find a cheap health insurance policy.
Although health insurance rates are set in advance and registered with the state, differences between policies can be so complex that it can seem like agents offer relative discounts. In reality, skilled brokers can use an applicant’s health record to identify highly specific policies offered at below-average prices.

Fact #4: Reputable health insurance brokers give clients appropriate time to decide on the right policy.
Health insurance providers often face criticism for the actions of third party marketing companies that rely on aggressive sales tactics. Licensed, professional health insurance agents don’t go door-to-door to promote a cheap health insurance policy with a tight deadline. Instead, trusted brokers and agents carefully select a few strong recommendations for clients to review in their own time.

Fact #5: Reputable health insurance agents offer free quotes.
In the quest to find a cheap health insurance policy, some shoppers are getting swindled by middlemen who claim to be able to find a bargain in exchange for an upfront fee. Other shoppers sign up for online services that suggest a monthly membership fee can grant access to discount insurance programs. Law enforcement officials advise consumers to avoid paying for publicly available information, like health insurance rates. Legitimate brokers and agents do not charge for consultations. Because they earn commissions from health care companies, they happily provide free quotes to prospective clients.

• Health Insurance Benefits

Shop around: You need to invest a good bit of time here. Check with as many home insurance companies as possible to get an idea of the rate quotes (an independent insurance agent can provide rate quotes from a variety of companies). Find out if your friends or family members like their home insurance company? If so, investigate the policies on offer there.

Increase your deductible: The deductible is what you have to pay if you incur a loss before your insurance policy term begins. Typically, home insurance deductibles start at $250. Many insurance companies offer you the options of increasing your deductible to:

• $500 and save up to 12 percent on your premiums
• $1,000 and save up to 24 percent
• $2,500 and save up to 30 percent
• $5,000 and save up to 37 percent

Ascertain that you can afford to pay the higher deductible out of pocket if something should happen before signing on the dotted line.

Stick to one insurance company: Many companies will give huge discounts if you buy both home insurance and auto coverage from them. Makes sense to be faithful to one company then, doesn’t it?

Factor in insurance also when buying a home: Pay careful though to the costs of insuring the house before you buy it. The overall structure and its electrical, heating, and plumbing systems of a newer home are likely to be in better condition than those of an older home. This can fetch you a discount on your premiums.
If you are constructing a home, you may want to consider where you want to live. If you live on the Atlantic Coast, you’ll want the house to be able to withstand wind damage, while on the Pacific Coast, you will need to be mindful of earthquakes.

Insure your home, not the land: Don’t include the value of the land in deciding how much home insurance you need to buy. Your agent can help you assess the coverage you need. Do not over insure or underinsure your possessions – they are the things facing the possibility of damage, theft and vandalism.

Improve security and safety: Installing security devices like bolts, locks, thief alarm bells, and smoke detectors can give you discounts of about 5 %, depending on the company. Your insurance company may also offer a significant discount of 15 or 20 percent on installing a sophisticated home-security system. But first check with your insurer to see which systems you’ll get a discount for.

Stop smoking: If you smoke, then you would be well advised to kick the habit. Accidents due to smoking account for more than 25000 fires in houses every year. Some insurers offer to reduce premiums if no one in the home smokes.

Look for senior citizens discounts: Insurance companies have noted that retired people stay at home more and spot fires sooner than working people. Older people maintain their homes well and are alert when it comes to spotting a calamity. If you’re at least 55 years old and retired, you might qualify for as much as a 10 percent discount.

Watch out for group coverage: Big companies and businesses often include a discount for their employees and members when negotiating insurance deals.

Stay with an insurer: If you’ve kept your coverage with a company for several years, your insurance agent may be more considerate to you. Several insurers will reduce their premiums if you have been with them for a number of years; and some companies will discount you as much as 10 percent after six years.

Check your policy annually: Review your policy annually or as frequently as possible so as to make the necessary adjustments. If, for instance, you sold a valuable painting, your amount of personal property coverage will reduce. But if you’ve added a garage, you’ll need to increase your dwelling coverage.

Look for private insurance first: When checking out insurance companies, look out for independent insurance agents first. Let your state insurer be the last resort. If you live in a high-risk area — one that is especially vulnerable to coastal storms, fires, or crime — and think you’ll be forced to buy home coverage from your state’s high-risk insurance pool, this alternative may come in handy. The insurance will be cheaper in the realm of private insurance.

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Factor in insurance costs when buying your home: When an insurance company is deciding your premium they are going to look at its age, the materials used to build it and the location.

• If your house is in a hurricane, earthquake, or flood zone then, you can expect you’re your monthly premium is going rise greatly.
• If your house is close to a fire hydrant or fire station your premium may go down.
• If your house is newer, has up to standard wiring, or is built with a suitable material for your area you may get discounts on you homeowners insurance.

Find out what your insurance may cost you before you buy the house you have been eyeing. It may turn out that that classic house isn’t such a great deal after all.

Take the Time to Shop Around: Get as many quotes as possible if you want some big savings on your insurance. It may not be exciting but is worth it. The best way to get multiple insurance quotes is through an online referral services. By providing your information into the referral system you will be able to get multiple insurance quotes from insurance agents in your area. Shopping around for insurance is the best way to find out if you are getting the best deal available.

Do Your Homework: You may be offered the lowest homeowners insurance premium in the world but it stands to your disadvantage if the company goes out of business when you make a claim. Read up as much as possible on the the insurer and the policy you are keen on.
The resources for doing this are plenty. Your state department of insurance should have information on the licensing status of a company as well as any actions taken against an insurance company by the state. Check for information on consumer complaints and the financial status of the company.
Fidelity is the key – If you have been with an insurance company for a long time then you may be up for a discount. If you are able to find a homeowners insurance policy with a solid company you will be able to stick with that company over the years.

Know Your Deductible: Your homeowners deductible can substantially change your monthly premium. Do you want a home insurance policy that will cover damages large and small or are you just interested in having a policy that will cover you for major damages to your property?
A comprehensive homeowners insurance policy will be a low deductible plan. If you are more interested in saving money, it may be best to go for the higher deductible and take the risk for smaller claims.

Insure the home not the land: There is a big difference between the cost of your house and the cost to rebuild or replace your house. Remember that damages happen but the value of the land on which the structure is built remains the same. It is unnecessary to insure the land under your home. When insuring your home you can save money if you just insure the value of the home and not the land.

Ensure adequate coverage: Take an annual inventory of the items in your home and try to assess the value of your possessions routinely. Many a times, you will find that your have over insured your home and its contents. At other times you may find that the coverage is not suitable for the items purchased over the previous year.

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• Forms 2, 3 and 8 for homeowners
• Form 4 for tenants or renters
• Form 6 for condominium owners.

However, it is important to note that not all companies offer these policies. Therefore, being thoroughly familiar with your policy is mandatory.

Perils & Policies

Peril is the word the insurance industry uses for any event that could damage your property. Most policies have two sets of perils:

1. Covered Perils
2. Excluded Perils (not covered by your insurance policy)

While each insurance company prepares its own contracts, most sell policies that are similar. The form number on a typical policy usually includes one of these labels:

• HO-2 & HO-4 The Broad Form: These policies list ALL covered perils which are about 16 of them. The policy will not pay for any peril not listed!
• HO-3 The Special Form: The H0-3 is the most common homeowners policy today. Instead of listing the perils it does cover, the HO-3 policy lists the perils it does not cover. Therefore it will pay when the building damage is caused by any peril (subject to limitations in the policy) that is not on the list of exclusions. The coverage for contents (personal property) in HO-3 is identical to the HO-2.
• HO-4 Tenant (or “renters insurance”) The Broad Form: The HO-4 policy insures the contents of your rented home but not the building itself. It lists every covered peril.
• HO-5 Comprehensive Form: The HO-5 covers most types of damage except earthquakes, wars and floods.
• HO-6 Condominium: The HO-6 policy insures the contents of your condominium and only that part of the building which you own. Know what part of the building your insurance covers and compare it to the parts covered by the condo association - make sure the differences are filled.
• HO-8 Market Value: The H0-8 policy insures the structure based on its “market value.” If your house burns down, the policy will pay no more than the price the house would have fetched if sold on the day before the fire.

Common exclusions for the HO-2, -3, -4, -5 and -6 forms

Typical exclusions include earthquake, flood, water damage (sewer backup or a basement leak), power failure off your premises, poor home maintenance, war collapse, nuclear hazard, intentional acts of an insured, laws and ordinance enforcement (such as building codes).

Be sure to review your policy’s exclusions and limitations so that you know what is not covered. You can usually purchase additional coverage for most items that are excluded under the policy. Some insurance companies offer personal liability coverage, medical payments coverage and mine subsidence coverage as add ons which can be bought separately.

Although home insurance is not legally required in most states, if your home is mortgaged, your lender may require you to buy insurance on your home. To get the best value for your money, you must assume responsibility for purchasing your home insurance. There is no good time for buying insurance. But do it now.

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Why Shop around:

• Rates offered by the companies vary from state to state.
• Every company in your state is bound to insure you if it legally required.
• You can choose your insurance provider. Companies that provide more expensive coverage then, must either lower their rates or be satisfied with fewer clients.

Shopping for insurance is not difficult, it only requires a good bit of time. It may not be exciting, but it very possibly will save you money. There maybe many companies offering insurance. Sometimes the best rates and best service may come from a company you are not familiar with today.

Every company must cover your home, wherever it is. You may contact any company or agent selling insurance and ask for a quote and you may even look up companies online. You don’t have to live in the area in which the agent is located to get a policy from a company he or she represents.

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Who can buy home insurance

Owners: To safeguard both your house and personal belongings.
Tenants: To protect your furniture and other personal property.
Everyone: To protect against liability for accidents that injure other people or damage their property.

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