What is a health insurance policy?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 24, 2015

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A health insurance policy is a binding contract issued by an insurance company to an individual or group which promises to pay for health care reasonably required by the “insured” or “policy holder” or “certificate holder” to treat illness or injury. If the insurance policy is issued to an individual, the individual applies for the policy and pays the premiums either directly or through payroll deduction. Typically, in individual health insurance the individual policyholder is insured and also, in exchange for a higher premium, the insurance covers a spouse and dependent family members.

In the circumstance where the health insurance is obtained by an employer or a group or an association, the entity is the “group policyholder” and the covered individuals receive “certificates” of insurance. Generally, in addition to payment of premiums by the policyholder, the insured is also responsible for payment of deductibles and co-pays (a percentage of actual charges or a fixed amount per visit) which are predetermined in the policy at set amounts or rates.

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