Function

• Health insurance is an agreement between a financial company and an individual or family that promises to pay all or a portion of certain medical expenses that the person or family incurs.
  
  

Features

• Most types of health insurance require the payment of a fee or premium either annually, semiannually, quarterly, monthly or biweekly in order to have the insurance coverage. In addition, some health insurance policies require the insured to pay a percentage or portion of their health care costs in an amount called a deductible.
  
  

Process

• When a health care provider or medical institution performs a service, it submits a claim to the health insurance company requesting payment for the service, and then health insurance company denies, accepts or partially accepts the request. Any additional amounts that are not covered by the health insurance are billed to the patient.
  
  

Types

• There are a variety of health insurance types, including major medical, hospitalization, health maintenance organizations, point-of-service insurance and preferred provider organizations. Each type has its own characteristics concerning the coverage and limitations on the choice of health care provider.
  
  

Considerations

• Oftentimes, employers offer group health insurance to its employees, which allows them to obtain insurance at a lower group rate. Some companies even pay a portion of the insurance premiums on the employees' behalf.