Classes of Health Insurance Policies
Classes of Health Insurance Policies
Health insurance is a generic term encompassing several types of insurance contracts which, though related, are designed to protect against different risks.
There are two separate types of insurance included in the generic term health insurance. One type provides coverage for expenses related to health care, and the second is designed to provide payments for loss of income. The terminology used to reference health insurance varies from state to state as well as from company to company. The health insurance policy that is designed to provide periodic payments when an insured is unable to work because of sickness or injury is referred to as disability income insurance.
Individual vs. Group
Most health insurance is written on a group basis from one’s employer. Individual coverage may be available for a family, but it would be medically underwritten.
Individual health insurance policies are underwritten to cover the applicant, their spouse and family. Many of the factors considered in life insurance underwriting apply. However, unlike life insurance where there can be only one death claim per insured, in health insurance, multiple claims per insured is the rule rather than the exception. For this reason, underwriting and classification of risk is extremely important from an insurance company standpoint.
The three most important underwriting factors considered in accepting or classifying health insurance applicants are as follows:
- Physical condition of the applicant and other insureds;
- Moral and morale hazards; and
- Occupation.
From a consumer’s standpoint, as important as the coverage provided, the right to continue the policy is extremely important, particularly if he/she has become uninsurable. While nearly all states have adopted the NAIC model law for uniform mandatory provisions, there are still more variables in individual health insurance policies than other types of policies.
Group health insurance underwriting varies in important particulars from that of individual health insurance. While the purpose remains the same, evaluation of the inherent hazard and assignment of the appropriate class and premium rate, the techniques and standards for evaluation are decidedly different.
The group underwriter has the responsibility not only of deciding whether and on what basis the group may be insured, but also of drawing the contract in such a way as to prevent adverse selection against the insurer by individuals eligible for coverage. Few applications for group health insurance are rejected if the applicant complies with any applicable statutory definition of a group eligible for this type of coverage. In part, this is because the underwriter may adjust the coverage and requirements necessary to afford protection to the insured. The underwriter’s attitude toward group risks can be less restrictive than with individual policies, because the group policies are subject to annual re-evaluation on the anniversary date. Remedial measures may be taken if the initial evaluation proved to be incorrect.
Franchise insurance provides health coverage for small groups whose numbers are too small to qualify for true group insurance. Franchise insurance is not group insurance, since individual policies are issued for each participant. Individual underwriting is done for each person, and each participant submits his or her own application and medical history. Premiums charged are generally less than for an individual policy, but more than group coverage.

Private vs. Government
Private insurance companies provide a large portion of all individual and group health insurance. The federal government, however, provides coverage for some disabled individuals and those over age 65 in the form of Medicare and Medicaid. Medicaid offers assistance as both a federal- and state-sponsored program. The federal government also offers disability insurance protection through the Social Security system.
Limited vs. Comprehensive
Limited health insurance policies only cover specific accidents or diseases. A comprehensive plan would cover all sickness or accidents that are not specifically excluded.
- Rated 5.00 out of 5 based on 1 customer rating$50.00
- Rated 5.00 out of 5 based on 1 customer rating$50.00
- Select options This product has multiple variants. The options may be chosen on the product page
Rated 5.00 out of 5 based on 1 customer rating$5.00 – $9.00- Select options This product has multiple variants. The options may be chosen on the product page
Rated 5.00 out of 5 based on 1 customer rating$95.00- Select options This product has multiple variants. The options may be chosen on the product page
Rated 5.00 out of 5 based on 1 customer rating$55.00- Select options This product has multiple variants. The options may be chosen on the product page
Rated 5.00 out of 5 based on 1 customer rating$5.00 – $9.00- Select options This product has multiple variants. The options may be chosen on the product page
Rated 5.00 out of 5 based on 1 customer rating$95.00- Select options This product has multiple variants. The options may be chosen on the product page
Rated 5.00 out of 5 based on 1 customer rating$55.00- Select options This product has multiple variants. The options may be chosen on the product page
Rated 5.00 out of 5 based on 1 customer rating$5.00 – $9.00- Select options This product has multiple variants. The options may be chosen on the product page
Rated 4.17 out of 5 based on 6 customer ratings$5.00 – $9.00
Wrenn Apparel is a fashion-forward brand that offers a wide range of high-quality clothing and accessories for men and women. With a focus on style, comfort, and sustainability, Wrenn Apparel offers everything from casual wear to office attire. Whether you’re looking for a stylish and comfortable outfit for the weekend or a professional look for the office, Wrenn Apparel has something for everyone. Shop now and experience the difference that Wrenn Apparel’s commitment to quality and style can make in your wardrobe.
Self-Funded Plans and ERISA
Self-funded plans are funded by the insured (usually the employer) and administered by a third party. A successful self-funded program will have the following characteristics:
- A group large enough to reasonably predict future loss experience;
- Sound statistical data to support the self-funding concept;
- A stop-loss contract to assume losses beyond the insured’s retention;
- A third party administrator who services claims; and
- Flexibility in plan design and administrative procedures.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that was enacted to ensure that employees receive the pension and other benefits promised by their employers. ERISA also incorporates and is tied to provisions of the Internal Revenue Code (IRC) designed to encourage employers to provide retirement benefits and other benefits to their employees. Many provisions of ERISA and the IRC are intended to ensure that tax-favored pension plans do not favor the highest-paid employees over rank-and-file employees in the way benefits are provided. To achieve these ends, ERISA has a complex series of rules that cover pension, profit-sharing stock bonus, and most “welfare benefit plans,” such as health and life insurance. ERISA supersedes almost all state laws that affect employee benefit plans and has thus created a single federal standard for employee benefits.
Long-Term Care (LTC) Insurance Policies
Secure your future with comprehensive insights into Long-term Care (LTC) Policies. Navigate the complexities of long-term healthcare planning with our guide, exploring the benefits and coverage options these policies offer. Stay informed about the latest...
Read MoreWhat’s Medicare Supplement Insurance (Medigap)
Enhance your healthcare coverage with our comprehensive guide to Medicare Supplements. Explore the ins and outs of supplemental insurance options, designed to fill the gaps in your Medicare plan. Gain valuable insights into coverage benefits,...
Read MoreEthanWrenn is a YouTube channel that offers a unique blend of finance, investing, and gaming content. Hosted by Ethan, an expert in finance and investment, this channel provides valuable insights and tips on how to navigate the world of finance and investing. But that’s not all, EthanWrenn also showcases Ethan’s passion for gaming, as he shares his thoughts and experiences playing a variety of video games. With a mix of informative and entertaining content, EthanWrenn is the perfect channel for anyone looking to learn about finance and investing or for those who simply love video games. So, if you’re ready for an entertaining and educational journey, be sure to subscribe to EthanWrenn on YouTube today! Make sure to leave a like, comment and subscribe to stay up to date with the latest information available.
Make sure to check out our merch store at:
https://ethanwrenn.com/shop/
Consider joining our FREE community Discord server at:
https://discord.com/invite/pmpWcHs
Donate using Stream Labs and have your message appear on stream by clicking here:
https://streamlabs.com/ethanwrenn
Follow me across my various social media profiles!
Website: https://ethanwrenn.com/
Twitch: https://www.twitch.tv/ethanwrenn
YouTube: https://www.youtube.com/c/EthanWrenn
Reddit Community: https://www.reddit.com/r/EthanWrenn/
Personal Reddit: https://www.reddit.com/user/EthanWrenn
LinkedIn: https://www.linkedin.com/in/EthanWrenn
Ebay: https://www.ebay.com/usr/ethanwrenn
Twitter: https://twitter.com/ethanxwrenn
Instagram: https://instagram.com/ethanxwrenn/
TikTok: https://www.tiktok.com/@ethanxwrenn
Parler: https://parler.com/ethanwrenn
Dlive: https://dlive.tv/Intellx
Periscope: https://www.periscope.tv/EthanWrenn
SnapChat: https://www.snapchat.com/add/ethannn_619
Gaming Profiles
Steam Community: https://steamcommunity.com/id/ethanwrenn
League of Legends: https://na.op.gg/summoners/na/ethanwrenn
World of Warcraft: https://worldofwarcraft.com/en-us/character/us/sargeras/int%C3%AAllx
World of Warcraft Guild: https://worldofwarcraft.com/en-us/guild/us/sargeras/wrenn
Follow the official WrennLLC social media profiles!
Website: https://wrennllc.com/
Twitch: https://www.twitch.tv/WrennLLC
Twitter: https://twitter.com/WrennLLC
Instagram: https://www.instagram.com/WrennLLC/?hl=en
Reddit Community: https://www.reddit.com/r/WrennLLC/
Business Reddit: https://www.reddit.com/user/WrennLLC
SnapChat: https://www.snapchat.com/add/WrennLLC
Q: What brokerages do you recommend?
A: The following companies offer brokerage services.
Join Robinhood today using my link to receive a FREE stock to have in your portfolio:
https://join.robinhood.com/ethanw186/
Sign up for Webull and receive 4 FREE stocks, limited time!
https://act.webull.com/te/m3fVcVFQYG41/gje/inviteUs/
CashApp is offering new users who sign up with my link $5 FREE!
https://cash.app/app/DNBFZKD
Sign up to Coinbase to receive $10 in FREE Bitcoin!
https://www.coinbase.com/join/wrenn_k
Pingback: Principal Types of Losses and Benefits - Ethan Wrenn
A++++++++++++++++
Great Article, Very Informative!
What type of content would you like to see more of in the future? Let us know in the comments!
Wow, great blog.Really thank you! Fantastic.