Explained: What is Health Insurance?

A combination of rising medical costs combined with the global pandemic has seen the health insurance market expand in recent times. Once seen as more of a ‘nice-to-have’ policy, health insurance is increasingly considered an astute financial decision instead of mere compensation for poor health. But what is health insurance by definition, do we really need it, and which policy is of most benefit to us?

Contents

So, What is Health Insurance?

Which Insurance is Best: Life or Health?

What is the Most Basic Health Insurance?

Which Health Insurance has the Best Benefits?

Conclusion

So, What is Health Insurance?

Health insurance coverage is a premium paid by an individual to a licensed insurer. It covers any costs that may arise as a result of ill health.

Different policies and insurance plans cover different medical issues. Health insurance may insure you against emergency treatment, contribute towards prescription costs, and even pay for operations. Health insurance can differ significantly from one nation to the next. This is due to the differences in how national healthcare systems are organised and financed.

This form of insurance is sometimes confused with life insurance, although the two are completely different, as shown below.

Which Insurance is Best: Life or Health?

We have already covered and hopefully answered the question, what is health insurance, but how does life insurance differ? Life insurance differs from health insurance as it exists to compensate your dependents upon your death, most commonly taking the form of a lump sum. It ensures your partner and children are not left financially bereft in your absence.

As to whether health or life insurance is ‘best’, that’s an impossible question to answer. The two guard against different circumstances, which we will all experience at some point in our lives. As a result, both life and health insurance will be of benefit to many people.

When considering whether to take out health or life insurance – or indeed both – individuals should look at their circumstances and decide based on these. A single person in their early 20s may not consider either policy relevant at that stage of their life. But, add a partner and/or children to the equation, and one’s responsibilities change with immediate effect.

Furthermore, age brings with it more significant healthcare risks, so the need for life and health insurance should be reassessed regularly.

What is the Most Basic Insurance?

As with most policies, a health insurance plan does not follow a set of strict rules. Anyone shopping around for a deal will quickly learn about the significant number of different forms of health insurance out there. One company’s ‘basic’ policy may be much more comprehensive than another’s.

To give an example of a basic form of health insurance, let’s look at GasanMamo’s policies. Our basic health insurance is also called our Vital Plan. It offers limited cover for both in-patient and day-patient medical treatment in hospitals and clinics worldwide, except in the US and Canada.

This basic plan can be complemented by adding outpatient benefits for an additional premium. These would cover charges for GPs and consultants, together with diagnostic procedures and alternative therapies.

For many persons, the Vital Plan is all that’s needed. However, if you happen to have any dependents, it’s worth considering a more comprehensive policy. For a full overview, read our dedicated health insurance information.

Which Health Insurance has the Best Benefits?

Just as with the notion of ‘basic’ health insurance, you’ll find different benefits from one provider to the next. The key to finding the right health insurance is to take a needs-led approach. Make a list of your healthcare needs, along with those of your partner and/or dependents.

Consider the near future and the likelihood that any health-related treatment will be needed. Once you’ve established your own insurance needs, you can begin searching for a policy to match them.

To get the best deal, it’s vital to follow these steps:

Declare your past and present medical history, including medically pre-existing conditions.

Do the same for your dependents.

Research insurance company backgrounds to gauge reputation reliability.

Read the small print of any policy before agreeing.

If you’re unsure about anything, ask your insurer directly.

The location should also play a part in your decision. For example, those living in the UK have access to a national health service, whereas those in the US do not. As a result, more than 90% of the US population pays for health insurance, compared to 22% of UK citizens. 

Remember that a benefit to one person is not necessarily of benefit to another. People have individual needs and circumstances, so seek out the most relevant policy to your life.

Conclusion

The world of insurance can be a complex and confusing one, but a little knowledge will prove vital when it comes to finding the right deal. Even if now isn’t the right time for you to take out health insurance, a good understanding of the concept will ensure you’re in the best position to make an informed decision when the time comes.

Begin your own search for the right plan by looking through our clear and transparent benefits on our health insurance page.

GasanMamo Insurance is authorised under the Insurance Business Act and regulated by the MFSA.