Types of Health Insurance Policies
Medical expense plans
Indemnity (fee-for-service) plans pay a share of billed charges and let the insured see any provider. Managed care plans trade network restriction for cost: an HMO requires a primary care physician and referrals and generally pays nothing outside the network except emergencies; a PPO pays more in-network but allows out-of-network care with higher cost sharing; a POS plan blends the two; an EPO has a network but no referral requirement. A high-deductible health plan paired with a health savings account gives tax-advantaged savings for medical costs, provided the deductible meets statutory minimums.
Disability income
The policy replaces a percentage of earned income, typically 60–70%, for a benefit period after an elimination period. "Own occupation" pays if the insured cannot perform their own job - the more favorable and costly definition; "any occupation" pays only if the insured cannot work in any job for which they are reasonably suited. Residual or partial disability benefits pay a proportion when income drops. Short-term disability typically runs up to six months; long-term disability runs years or to age 65.
Other coverages
Long-term care pays for skilled, intermediate, and custodial care and typically triggers when the insured cannot perform two of six activities of daily living or has cognitive impairment. Critical illness pays a lump sum on diagnosis. Hospital indemnity pays a fixed daily amount. Accidental death and dismemberment pays for accidental losses on a schedule. Dental, vision, and Medicare supplement policies fill gaps. Group plans often grant a conversion privilege to individual coverage on termination, and COBRA extends group coverage temporarily.
Trap
Do not confuse long-term care (custodial help with daily living) with long-term disability (replacing lost income).