Australian Health Insurance

Health insurance is similar in principle to other forms of insurance. Health insurance is a contract between an individual and an organisation whereby the organisation, usually an insurance company, agrees to pay for an agreed amount of costs on an agreed range of illnesses in return for monthly fees and premiums (claim costs).

For example, an individual may chose to purchase an insurance plan that covers them for up to $1000 worth of dental work as it is not covered by Australia’s universal health care system. If that individual is then involved in an accident and sustains and injury to his/her teeth, or the health of the individual’s teeth naturally declines to the point where it needs attention from a dental professional, the insurance company will pay the dental professional for services rendered.

The benefit of health insurance is that it lessens the financial impact that often accompanies emotional and physical damage when an unexpected health problem arises.

Without health insurance many people would have to suffer through painful illnesses that require medical attention until they are able to afford to receive that attention. In many cases insurance makes it possible for individuals to lead a longer, healthier life.