Investing in some form of insurance against financial difficulties in the event of sickness is considered a prudent move, especially in these times of escalating medical and hospitalization costs. This investment could be in the form of group or individual health insurance plans.

The oldest and most common kind of individual health insurance is the type offered by insurance companies. For a certain premium, you are given a policy covering specific illnesses up to an agreed amount. With this kind of insurance, you are free to choose your doctor, the services you need provided they are included in your policy, and the hospital where you want to stay. Often, however, you will need to pay for these services first and later file a claim settlement with your insurance company for reimbursement.

An alternative to the above is the health care coverage provided by health management organizations (HMOs), preferred provider organizations (PPOs), and point of service plans (POS) providers. These services may be availed of either by paying a premium or through subscription plans. In one type of plan, members or subscribers are usually asked to select a primary care physician (PCP) who is affiliated with the organization. His main task is to decide, after examining the patients, whether the services of specialists are necessary. Other plans do not require a PCP but provides a list of physicians that their clients can consult as well as a list of hospitals where they can stay if they need to.