What is health insurance?
Simply put, health insurance is protection against medical costs. A health insurance policy is a contract between an insurer and an individual or group, in which the insurer agrees to provide specified health insurance at an agreed-upon price (the premium). Depending on your policy, your premium may be payable either in a lump sum or in installments. Health insurance usually provides either direct payment or reimbursement for expenses associated with illnesses and injuries. The cost and range of protection provided by your health insurance will depend on your insurance provider and the particular policy you purchase. If your employer does not offer a health insurance plan, you may wish to purchase health insurance on your own.

Why do you need it?
Let's face it--health insurance is a necessity in today's world. The costs of medical care and treatment have soared to new heights in recent years and are expected to rise even further in the years to come. Think for a moment about the enormous medical costs you would incur if you suffered a major injury tomorrow or were suddenly stricken with a life-threatening illness. Uninsured people live with such risk every day of their lives; health insurance can shield you from that risk. Even if you're healthy today and have never had any major problems in the past, you simply can't predict the future.

In addition to medical emergencies, routine conditions requiring visits to a physician happen all the time (e.g., pregnancy, viruses that seem to hang on forever, moles that don't look quite right). This is especially true if you have children. Ear infections, rashes, and high fevers are commonplace with infants and children; numerous trips to the doctor can be pretty expensive without health insurance.

What do you need to know?
You should know where to get health insurance, and understand the various types of private health insurance that are available. There are some important differences between indemnity plans, HMOs, PPOs, and POS plans.

You should understand your own health insurance policy, and become familiar with common health insurance provisions, including limitations, exclusions, and riders. It's important to know what your policy covers, and what you'll have to pay for out of your own pocket.

While price is an important consideration, there are also other factors that may influence your decision when it come to choosing a health insurance plan.  You should understand the taxation of health insurance benefits and premiums, especially if you're self-employed.

You should also be aware of your COBRA rights, in the event that you lose your health insurance coverage.