Knowing what kinds of medical insurance there are can help protect you against high unexpected costs. Photo from Adobe Stock.
The importance of having robust health insurance is not lost on the American people. As medical inflation continues to rise, it’s never been more imperative that people invest their money in protecting their livelihoods against medical disasters. Do you have a few thousand dollars lying around to pay for a single ambulance ride? What would happen to you if you had to quit your job because of a cancer diagnosis? Could your bank account take a sudden many-zeroed hit?
In this article, we will review 10 types of health-related insurance plans available today, covering everything from commonly known individual and group health insurance to more unique products like pet and critical illness insurance. If it can help shield you from bearing the burden of a steep medical bill, we’ll discuss it.
If you would like to learn more about the types of individual health insurance plans (HMO, PPO, POS, etc.), please refer to our article here.
10 Kinds of Medical Insurance You Should Know About
1. Individual Health Insurance & Group Health Insurance
Individual health and group health policies are designed to cover your routine, preventative, and basic emergency healthcare needs (including prescriptions). The only difference between the two is that individuals purchase individual health plans to protect themselves, and group health plans are purchased by companies or organizations to cover their employees/members. With individual health plans, the cost can be lowered if the purchaser qualifies for government assistance, otherwise, they will be expected to pay all associated insurance costs (premiums, deductible, copayments, coinsurance, out-of-pocket maximum) on their own. With group health plans, the overarching entity typically pays a fraction of all related expenses so group members will not have to pay as much. Because the benefits offered for individual and group plans are so variable, we recommend that consumers carefully research their options, educate themselves on any coverage gaps, and take their must-haves into account before signing up.
Average Cost Per Month (2024): varies too widely to approximate.
2. Disability Insurance
Disability insurance is something someone can purchase for themselves as protection against the risk of becoming disabled. If you’re in a situation where you cannot afford to lose your current income stream (which is, let’s face it, all of us), and then you suffer an illness/injury that disables you and makes it impossible for you to work, that’s when this kind of insurance will activate. You’ll receive monthly payments from your insurance company to help replace the income you can no longer provide. Because disability insurance is meant to be an income replacement, it’s not uncommon that employers will offer their employees some level of disability coverage.
Average Cost Per Month (2024): $200-$900.
3. Life Insurance
Life insurance is typically meant to pay your outstanding debts, cover lost income, pay down any bills associated with your housing (mortgage, rent), and fund the futures of everyone you would leave behind if you suddenly passed away. For example, say you are in a car accident and you spend the next few days in the hospital ICU. There, you receive emergency care and undergo a surgical procedure before, unfortunately, passing away. Your death will not waive the bill for the medical care you received. Your next of kin are expected to pay for everything, no matter the outcome. If you had a life insurance policy, it would kick in and help cover that cost (and more).
- NOTE: Depending on the plan, life insurance may also help pay for your healthcare should you face an unexpected significant injury or illness while alive, not just after death. You can also use it to build generational wealth. You do not have to pass away for life insurance to be helpful.
Average Cost Per Month (2024): $26 (will be more expensive the older you are when you sign up).
4. Dental Insurance
Dental insurance is designed to help cover the cost of routine dental care like cleanings, X-rays, fillings, etc. It can also cover more complex procedures like root canals, extractions, wisdom teeth removal, restorative measures like crowns, bridges, and dentures, and emergency dental services post-accident (ex. falling into a table and chipping a tooth). There has been extensive research proving the connection between poor oral hygiene and the risk of heart disease, diabetes, and other life-altering conditions, so having dental insurance and seeking out regular dental care can help spare you from the exorbitant medical costs associated with developing those serious issues down the line.
Average Cost Per Month (2024): $20-$50.
5. Vision Insurance
Vision insurance is for anyone concerned about improving and maintaining their eye health. If you need glasses, contacts, eye exams, medications that treat eye conditions, or vision-based procedures like LASIK or cataract removal, vision insurance is intended to bring down prices. As with all insurance products, not all vision plans are created equal, so it is important that you educate yourself on any offered benefits before getting on a plan.
Average Cost Per Month (2024): $5-$30.
6. Long-Term Care Insurance
With most Americans worried about outliving their savings and not having enough money in retirement, long-term care insurance is becoming more and more prevalent. As the name suggests, long-term care insurance is meant to protect enrollees from the increasingly high costs of extended personal and/or custodial care. If you foresee yourself needing the services of an in-home health aide or nurse, or potentially living in an assisted living facility or nursing home in the future, then long-term care insurance should be a part of your financial plan. That being said, long-term care insurance isn’t just for our elders! Individuals with chronic illnesses and/or disabilities who need extra help to move around, go to the bathroom, bathe, and do other daily tasks would greatly benefit from having long-term care insurance as well.
Average Cost Per Month (2024): $80-$535.
7. Hospital Indemnity Insurance
Hospital indemnity insurance is a game-changer in situations where the beneficiary is hospitalized. As far as American healthcare is concerned, there are few things pricier than hospital services. Because normal health insurance plans are designated more for your routine or preventative care, they may not provide sufficient financial protection against a $10,000 emergency room bill. Purchasing a hospital indemnity policy guarantees that if you are ever hospitalized, you’ll receive a lump sum payment from your carrier to significantly reduce your charges.
Average Cost Per Month (2024): $10-$100.
8. Critical Illness Insurance
Critical illness insurance can be extremely helpful for people who are diagnosed with serious conditions or who experience a significant health event such as a stroke or heart attack. This kind of insurance can be used to pay for treatments, living expenses, or even replace lost income if the event/illness keeps the enrollee away from work.
- NOTE: If you’re especially worried about a particular diagnosis, there are plans out there for you. For example, if you have a history of cancer in your family or simply want to avoid the financial strain that typically comes with a cancer diagnosis, you can purchase a cancer-specific plan to ensure that things like chemotherapy, radiation, biopsies, screenings, therapies, and other procedures are covered.
Average Cost Per Month (2024): $15.
9. Accident Insurance
Accident insurance is designed to cover you in the event of an unexpected injury. Depending on the plan, it can help pay for things like your ambulance or helicopter ride to the hospital, diagnostic testing or exams, and any emergency treatments or care you receive. It also may assist with the cost of post-accident necessities: medications needed to manage life while recovering, physical therapy sessions, equipment or supplies like wheelchairs and slings, and more. If your current health insurance plan has limited benefits, you live an active lifestyle or enjoy perilous hobbies, you work a job that has no paid time off or is high-risk, or you’re simply invested in protecting yourself against financial difficulty due to injury, then accident insurance is the product for you.
Average Cost Per Month (2024): $6.
10. Pet Insurance
While a bit of a wildcard (pun intended), pet insurance can also be vital to sidestepping excessive medical costs. You never know when a pet will need veterinary care, and just like with humans, paying for exams, prescriptions, treatments, and surgeries without any kind of assistance can be stressful at the very best, and disastrous at worst.
Average Cost Per Month (2024): $30-$80.
In Closing
While having good, basic health insurance is a crucial part of alleviating financial strain in today’s economy, it may not be enough to help consumers escape the devastating effects of rising medical costs. As always, it is best to be informed about what kinds of medical insurance there are, seek guidance when necessary, and continuously evaluate your circumstances so that you can be prepared for whatever price tag hangs on your future.
Have Health Insurance Questions?
We hope that this information on the different kinds of medical insurance has been helpful for you.
Insurance is oftentimes overwhelming, and we want to shed light on the industry by answering your questions. Comment below and your question may be the topic of our next post!
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