What is Health Insurance? And 8 Major Causes of Low Level of Health Insurance

                     What is Health Insurance?| And 8 Causes of Low Level of Health Insurance

The deliberate quest to be healthy has been rising, this rise in demand for health insurance can be linked to the saying that health is wealth. This statement alone has propelled the intention of people to engage in health insurance to secure their health status should in case of any misfortune and define an avenue to get more wealth.

However, health insurance has been viewed as a critical factor for a healthy economy. This is because if the masses or individuals living in a particular country are healthy, they can contribute heavily to that country’s economic development.

In most cases, the health insurance industries do facilitate social development. The insurance industry should do everything within its power to provide healthy friendly environments to the masses. For example, life insurance and property insurance.

Also, sickness insurance is non-permanent health insurance. In a beat to avert the condition whereby insurance protection for the sick is revoked just at the time he needs it most, the idea of permanent health insurance is developed.

Two main features of permanence existed; non-cancellability of the contract and, in most cases, a guarantee of a given premium rate throughout the lifetime of the contract. At age of up to, sometimes, 50 years no medical examinations are required of the prospective insured.

The contract is usually extended to the retirement age of 60 for women or 65 for men. Benefits do not often start immediately on payment of premium. A time interval, namely a deferred period, is allowed only after which the insured can receive benefits. In this article, learn and understand more about what health insurance is, and the 7 major causes of low levels of health insurance.

Causes of low level of health insurance and the 3 reasons why we don’t take health insurance 

the video below will explain more details

                  What is Health Insurance?

In each day that passes, some people fail sick and some are still healthy and sound. The fact that many individuals are sick on daily basis has not hindered others from being healthy.

Many individuals in this scenario have embraced health insurance coverage as the only lasting solution for protection should in case they become a victim of any health challenge. Howbeit, new health insurance industries are formed every day as a result of the high demand for their service.

Health insurance can be defined as the activities of financing medical expenses, by pulling the resources contributed or taxes paid into a common fund by financing some group of individuals under insurance coverage, to remit for all the medical services of the insured in line with the guiding principle of the agreement or contract.

The kind of health insurance coverage one has determines who pays the cost incurred, either a direct payment is made by the insurer to the insurance provider or the insured handles the cost out of his personal savings and he will be reimbursed back as at when due.

However, most countries of the world such as the United State of America, India, and so on,  that has zero health care coverage, usually link up or sum up their health insurance benefits with that of employers’ benefits packages.

     5 Environmental Consideration For a Reliable Health Insurance

Basically, a reliable and adequate environment must be developed for the introduction and development of health insurance. Among them includes

a. Effective and reliable product design: A well-designed health insurance service is highly needed to protect individual family savings in case of unexpected medical charges. Most people drive joy in higher achievements than those paid by them in the form of premiums.

The insurer, therefore, is expected to invest the premium money in such a way as to earn sufficient money for meeting the expenses of insurance claims. An insurance cover should be reliable and comprehensive without counterproductive gaps.

b. Reliable and effective cost of health insurance: The product of health insurance should be made in such a way as to minimize the cost of the premium. The product should be well-designed and packaged by the insurer to capture the interest of the customer.

People should get incentives to purchase health policies. Low premium rate attracts a large number of persons to purchase health insurance policies. Most developed nations have escalated health insurance as the insurer meets the most expensive treatments. People are ready to pay a higher premium to meet the high cost of medical bills.

c. Reliability, trust, and confidence: At the beginning of the contract, the insured should have trust and confidence in the insurance company that premium rates are at the lowest possible and they will get the claim amount at the time of need.

d. A reliable and structural facility: Government makes the provision for some structural facilities. Most regulatory authorities majorly guide the insurer to carve out insurance for health care. The insurer should be at liberty to approach hospitals, Doctors, physicians, and others for getting adequate information.

e. Sustainability of the product: The insurance product must be sustained for a long period of time for developing the trust and confidence of the policyholders.

The insurer must have to adopt proper funds management, pricing, and product design, and follow the regulatory features. Facilities of electronic data are crucial for the long-term success of the insurance industry.

                  Types of Health Insurance

We are going to considerably look at the two main types of health insurance and also point out their difference so that anybody visiting our site could be able to identify and differentiate the two with ease.

1. Public Health Insurance: This can be regarded as government health insurance, it is the type of insurance whereby the state government, local or federal government depending on the country, provides healthcare services to the masses in exchange for a premium.

Take, for instance, the public health care insurance service in the united state such as Veterans Health Administration {VHA}, and the Indian Health service are good examples of public health insurance.

2. Private Health Insurance: This is the type of insurance where all the medical health care services are subsidized by some group of insurance companies or individuals other than the government.

Take, for instance, some countries like United State, their healthcare services depends majorly on private health insurance.

   Causes of Low Level of Health Insurance

The causes of low levels of health insurance are as follows.

1. Low level of awareness of the common public.

2. Limited or low level of insurance products to cover health problems

3. Poor medical facilities

4. Inadequate supply of data and information

5. Differences in insurance cost.

6. Moral hazard.


Based on the preceding analysis, the motive of health insurance is to protect people from the catastrophic financial implications of illnesses.

However, public and private healthcare services are the two main types of health insurance. It is worthy of note that the causes of the low level of health insurance, and some of the basic considerations for reliable health insurance are contained in this article.

Health insurance coverage has been made in such a way that anyone without health insurance coverage is likely to pay heavily if hit by illness. With all the explanations above, I believe we have done justice to what is Health Insurance? and the 8 major causes of the low levels of health insurance.


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