Explained: Common Health Insurance Terms

Buying health insurance has become so easy these days. However, what can be tricky is all the jargon and the terms you need to understand to be sure of what you’re getting into. This is the case, especially if you’re buying health insurance for the first time. To make it easier for you, we’ve deciphered a few common health insurance terms:


This is the most common term and you probably already know what it means. Premium is the amount of money that you pay the insurance company for the privilege of having an active health insurance plan. This can be paid either monthly, quarterly or annually.


A deductible is an annual amount paid to the health services before your insurance company pays its share. For example, if you are meant to pay a deductible of $1,000, your insurance plan might not cover your bills until you’ve paid $1,000. However, if not paid, the plan still covers costs of things like preventive care doctor’s visits.

High Deductible Health Plan

A high deductible health plan, also known as HDHP, means that you will have to pay a deductible larger than what others are paying. This amount needs to be paid out of your pocket and the insurance company won’t cover much until your deductible is paid in full. The bright side of this plan is that your premiums won’t be as high and most likely, you will qualify for a health savings account. This account lets you save pre-tax dollars for covering medical expenses.


When under an active health insurance plan, every time you avail certain types of medical care, you owe a certain amount of money to the insurer. This is known as Copayment or Copay. The copayment amount can vary depending on the type of service you’re receiving. For instance, you may need to pay $30 each time you visit a general practitioner and $60 for every visit to the specialist.

To understand health insurance, you need to understand every word that is written on your policy. Before you sign on the dotted line, make sure you proofread each page. Hopefully, learning the above jargon and terms will help you. Remember, a little research will go a long way, when buying a health insurance plan.

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